Wednesday, August 21, 2019
WeWork Liabilities, Part II

Tuesday, August 20, 2019
WeWork’s Liabilities in Perspective

Wednesday, August 14, 2019
Comparing LinkedIn, Twitter Revenue

Wednesday, August 7, 2019
Leasing’s Effect on Retail Balance Sheets

Thursday, August 1, 2019
Using Calcbench to Find China Exposure

Tuesday, July 30, 2019
Leasing Details: The Comcast Example

Monday, July 29, 2019
Easy Fundamental Equity Analysis in Python

Monday, July 22, 2019
Calcbench Data and Tax Reform Insight

Wednesday, July 17, 2019
Downshifting in the Trucking World

Tuesday, July 16, 2019
New Report: Adoption of New Lease Accounting Standard

Friday, July 5, 2019
More Consequences of Lease Accounting

Monday, July 1, 2019
Another Example of Tax Reform Twisting Bottom Line

Thursday, June 27, 2019
The Latest Share Repurchase Data

Tuesday, June 18, 2019
Popping the Lid on Smuckers’ Goodwill

Tuesday, June 11, 2019
Not Much Fizz in LaCroix Right Now

Wednesday, May 29, 2019
An Example of Calcbench, Excel, and Insight

Monday, May 20, 2019
Research Paper: Capex Spending

Thursday, May 16, 2019
Psst: Got Any Weed?

Wednesday, May 15, 2019
Open Letter: SEC Proposed Rule for BDCs

Friday, May 10, 2019
General Motors and Workhorse

Archive  |  Search:
How to Review a Whole Industry
Tuesday, May 17, 2016

Now that Calcbench has a substantial number of first-quarter 2016 filings in our database (4,847 as of May 17), we thought we might use them to demonstrate how Calcbench databases can give you a sense of an industry’s overall health. We’ll use the oil & gas industry since, for better or worse, its overall health has moved in one clear direction: downward.

We started with the Data Query Tool, one of the most versatile pages on our website. First we had to select our industry. That’s easy: just press the Choose Companies button on the upper-left portion of the screen, and a light-box opens to let you choose your population of companies. We have a few standard groups (Dow Jones Industrial Average, S&P 500), and a flock of standard industry sectors on the left side of the box. (See figure 1 below.) Go to the Mining sector, and that will open four sub-sectors, including oil & gas extraction. Click on oil & gas, and you get a group of 539 companies.

Next we need to decide what data to pull for those 539 oil & gas companies. Scroll down to the bottom of the Data Query page, and you’ll find several lists of financial ratios. For our study here, we picked all the Liquidity Ratios. (See figure 2.)

Finally we need to set parameters for the data we want. Over at the top of the page on the right (see figure 3), we set the period type to “quarterly,” and the date range type to “single period” for 2016 and the first calendar quarter. And because we want to get a sense of the industry as a whole, on the Standard Export line, we need to check the “Average” box—which will give us the average ratios for the whole industry, but only those averages. We won’t get results for any specific company. (If you want that, leave the “Average” box blank.)

And then in the bottom left corner, hit the Export to Excel button. That’s it. Your data will zip directly to your desktop in a few seconds.

In our case, we ran this study of liquidity ratios for first quarter 2015 and 2016, to see how the oil & gas industry has changed in the last 12 months. (That’s easy enough to do, just set the date range to 2015 and re-run the exact same search.) The results we get are these:

Cash Ratio Current Ratio Accts Receivable Turnover Cash-to-Cash Cycle Operating Cash Flow Ratio Working Capital Turnover
Q1-2015 2.36 4.50 12.47 -392.90 2.32 5.96
Q1-2016 2.62 3.69 9.52 -1,645.44 0.58 -2.26

The six ratios above are only a sample, but as you can see, the numbers are not good. We’re especially struck by the negative working capital turnover ratio for 2016. That can only happen when working capital is negative (because the ratio is sales divided by working capital, and sales cannot be a negative number), and working capital only turns negative when your current liabilities are greater than current assets.

Negative cash-to-cash is another fairly rare bird to see in financial reporting. Typically this means Company A buys goods from Company B, but won’t pay Company B (or many other suppliers, probably) until Company A has actually sold those goods itself.

Most troubling is the operating cash flow ratio, which fell below 1 for first quarter 2016. That should set off alarm bells in the financial office, since it indicates that the industry generated less cash in the first three months of the year than it needed to pay off short-term liabilities. That can force companies to raise more capital, via bond offerings, equity sales, lines of credit, and like.

So, overall—not good times for oil & gas these days. We knew that already; Calcbench data just brings it into painfully sharp relief.

FREE Calcbench Premium
Two Week Trial

Research Financial & Accounting Data Like Never Before. More features and try our Excel add-in. Sign up now to try the Premium Suite.