##### Asked by: Thora Ochsenfeld

asked in category: General Last Updated: 23rd June, 2020# What industry average means?

**Industry average**. From Wikipedia, the free encyclopedia.

**Industry averages**(of financial ratios) are generally using as benchmarks or tools which helps business to make comparisons that helps to determine its position within the

**industry**and evaluate financial performance of the business.

Likewise, people ask, what is an industry ratio?

**Industry ratios** are mean or median financial **ratios** for a particular **industry**. The computed **ratios** for a company being analyzed should be compared to the **industry** average to form a basis of comparison. **Industry ratios** are published by financial information services such as Dun & Bradstreet.

Also, what is the current ratio industry average? Financial **ratios** vary by **industry** — depending on factors like inventory turnover and the size of a company. The wholesale **industry** has an **average current ratio** of 1.48. This **industry** includes trade, transportation, and utilities. The retail **industry** has an **average current ratio** of 1.47.

Likewise, people ask, how is industry average calculated?

**Calculate** it by dividing Net Credit Sales or Total Sales by the **Average** Accounts Receivable. Then, divide this **average** by either Total Sales or the Net Credit Sales (just be consistent from one year to the next so you are comparing like numbers.

Why are industry averages important to the interpretation of ratios?

Stock investors typically use **industry averages** to analyze the value of a company before making an investment. When investors apply **industry averages** to financial **ratios** using a company's financial reports from accounting, they can ascertain a company's profitability or possibilities for growth.