Thursday, August 22, 2013

Chemistry Industry Financial Ratios from US Census Data

In an early blog (Chemical Industry Data Found at the US Census Bureau Website; click here), I identified some of the data that the US Census Bureau collects and makes available on its website about the chemical industry.  In this blog, I provide results of my analysis of some of the chemical industry financial data provide by the US Census Bureau.

From the financial data provided by the US Census Bureau (click here for the data), I determined an approximate gross profit margin percentage (GPM%) and a percentage of revenues that chemical companies, surveyed by the Census Bureau, have spent on capital projects and on payroll for 2010 and 2011.

For all chemical companies surveyed, the GPM% is 49% for 2010 and 48% for 2011.  This assumes that the data presented by the Census Bureau under the total value of shipments column represents revenues and under the total cost of materials column, the cost of the shipments.  All chemical companies’ capital expenditures were approximately 3% of revenues in both 2010 and 2011.  Payroll expenses were approximately 7% of revenues in 2010 and a slightly less 6% in 2011.

In addition to providing financial data on all chemical companies surveyed, the Census Bureau also categorizes the chemical companies into seven sub-categories and provides data for each sub-category.  These sub-categories are: basic; plastics; agricultural; pharmaceuticals; paints; soaps; and others.  A more detailed description of what the sub-categories cover can be found at the Census Bureau webpage I provide a link to above.  I also computed GPM%, capital expense as a percentage of revenues, and payroll expense as a percentage of revenues for these seven sub-categories.    I can provide these numbers to you if you email me.

The US Census Data used to compute these financial ratios (GPM%; capital expenditure as a percentage of revenues; and payroll as a percentage of revenues) are probably the best data available.  Being able to benchmark your company’s performance against the ratio results from the Census Bureau data should be useful.

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