Standard Industry Classifications

Standard Industry Classifications

Standard Industry Classifications, How are you doing compared to others?

Standard Industry Classification codes (SIC) are used for financial statement “benchmarks” analysis. Your company’s financial results would need to be compared to others. SICs provide the format to compare a particular company’s financial data to their respective SIC-industry averages.

Explain how you would use SIC codes to analyze a Company Xs Accounts Receivable Turnover of four times per year versus a SIC rate of eight times per year.

Accounts receivable is a ratio that measures how a business turns the accounts receivable into cash during the financial period. The standard industry classification is important in the analysis of the financial statements and this creates the need to observe the measures in place in the determination of the different averages. In accounts receivable, the standard industry classification mandates the need to focus on the various remittances and the verification of the different records. The use of the SIC codes is to help in the management of the receivables and this creates the need for the detection of the terms of credit and the turnover of the ratio…………

 APA 497 words