Lab 5 is designed to examine the financial performance of your company in comparison to other pubic companies within the same industry. Companies that compete within the same industry are called "industry peers". Your team will use a Library database called Mergent Online to create an industry peers data set. You will then open the data set in Excel and save it to team work space.

1. Create an industry peer group by typing your assigned NAICS code into the "Advanced Search" mode of Mergent Online.
2. Use the Mergent Online "Report Builder" feature to create a Excel spreadsheet containing five data variables: total revenues; total assets; total liabilities; total employees; and shareholder equity.
3. Save the spreadsheet file in the SOM 210 component of the Isenberg Core Courses Portal.

Understanding Industry Peer Group Analysis

• Peer Group Definition: Industry peers consist of companies that operate within the same industry. Companies that make similar products or provide similar services are called industry peers. A peer group may consist of only a few companies or hundreds of companies depending on the size of the industry.
• Role of company financial data. Peer group analysis requires close examination of company balance sheet data. Data sets for peer companies are acquired from company annual reports and SEC (Securities and Exchange Commission) Filings (e.g., Form 10-K).
• Value of industry-company comparison. Industry peer analysis compares balance sheet norms for an entire industry (e.g., assets, liabilities, accounts payable) with your company's balance sheet data. Industry peer comparisons are a reliable method for evaluating a company's current and future financial status.

Mergent Online contains financial data and annual reports for all U.S. and most foreign public companies (over 10,000 US and 17,000 non-U.S. companies). Mergent adds value to information by "aggregating" all public company reports into a single database product, and providing an advanced search interface to analyze company performance. Mergent is widely used by American banks, law firms, and multinational corporations. By mastering Mergent Online, you acquire skills that enhance career opportunities.

Objective 1: Create an Industry Peer Group

1. Go to team's work space. Click on the team research URL label. In the Add/Update team research URL block, click on the Mergent Online database link.
2. On the Mergent Online search page, click the green Advanced Search tab above the search box.
3. On the Advanced Search screen--in Box 1 (called Select a Category/Sub-Category), select "Industry Codes" from the Category drop-down menu, then from the Sub-Category drop-down menu, select "Primary NAICS".
4. In Box 2 (called Select Operator), click the "Equal to" radio button.
5. In Box 3 (called Set Value), type your team's assigned 6-digit NAICS code (e.g., 721110).
6. In Box 4 (called Add Criterion), click the Add Criterion button, then click the Search button. Note: If you get zero results, click the NAICS Lookup link at the right of the Advanced Search screen to confirm the NAICS code

Objective 2: Build a Peer Group Spreadsheet containing Five Data Variables

1. At the top of the Search Results screen, click the link in the following sentence: "Click [here] to add all the companies from this search to the Company Analysis List."
2. In the upper right corner of the Search Results screen, locate the Company Analysis List Box. Click Expand, and then select Create Comparison Report.
3. On the "pop-up" Comparison Report Criteria Selection screen, go to Box 2 (called Report Item Selection) and use the drop-down menu to make the following selections:
   
   
   • From the Category drop-down menu, select Corporate Information.
   • From the Sub-Category menu, select Number of Employees. Then click the Add Report Item button.
   • From the Category drop-down menu, select Financial Summary.
   • From the Sub-Category menu, add these financial items one-by-one (by clicking the Add Report Item Button): Stockholder Equity, Total Assets, Total Liabilities, Total Revenues.
     
     
4. Check to make sure you have the correct five items listed in the Report Criteria Box, then press the Create Report button.
5. After your peer comparison report displays, click the Download link at the top right of the Comparison Report screen.

Objective 3: Save the Peer Group Data Set to Team Work Space as an Excel File

1. Save a copy of of the Excel spreadsheet to a diskette in the A: drive (the filename should indicate it came from the Mergent Online database).
2. Select the Add Document option in team work space. Add the Excel file to your team work space.
3. After posting the Excel spreadsheet, open a new document in Microsoft Word, and write a one-page report about the peer group of your company. This report should be double-spaced, using left and right margins of 1.25 inches, and top and bottom margins of 1 inch. The font for your report should be Times New Roman (12 point). At the very top of your file, list the name of the file on the first line, and team members on the second line. These 2 lines should be placed against the right margin. The rest of your file should be placed against the left margin.
4. When you finish this one-page report, save it to your diskette in the A: drive.
5. Then, using the Add Document option in team work space, add the Word file with your report to team work space.