Gathering information from Mergent Online - it

A guide to gathering financial data
for financial analysis from
Mergent Online®
Prepared by Pamela Peterson Drake, James Madison University
Table of contents
1. 2. 3. 4. 5. 6. 7. 8. 1.
What is Mergent Online®? ......................................................................................................... 1 Go to the James Madison Libraries’ web page ............................................................................. 2 Select the Mergent Online® database ......................................................................................... 2 Select data from Mergent Online® .............................................................................................. 4 Download the data ................................................................................................................... 7 Get the data ready in Microsoft Excel®........................................................................................ 8 Calculate ratios ....................................................................................................................... 11 Graph the ratios ..................................................................................................................... 12 What is Mergent Online®?
Mergent Online® provides a wealth of financial data on a large number of corporations, both in
the U.S. (11,000+ companies) and elsewhere (17,000+ companies). Launched in 2003, Mergent
Online is the descendant of Moody’s Manuals, which had been one of the primary providers of
financial data for U.S. firms. 1
You can find and download up to fifteen years of annual data or fifteen quarters of quarterly data
for a company. This data consists of the items reported on the corporation’s income statement,
balance sheet, statement of cash flows, and statement of shareholders equity. You can also find
financial ratios, other corporation-specific information, and information about competitors.
The purpose of this guide is to provide step-by-step instructions on gathering financial data from
Mergent Online® using the James Madison University’s libraries and transforming it into a
Microsoft Excel® worksheet for analysis.
If you are accessing the data from off-campus, you will need to use one of two methods of
authenticating your use (see http://www.lib.jmu.edu/proxy/).
1
The Financial Information Services division of Moody’s Investor Service was acquired by Mergent, Inc. in
1998. Mergent, Inc., was acquired in 2004 by Xinhua Finance, a Chinese financial services and media
company.
1 of 16
2.
Go to the James Madison Libraries’ web page
Go to www.jmu.edu and follow the links to the Libraries & Educational Technologies web page:
3.
Select the Mergent Online® database
Click on the link to “Research Databases & Resources” in the right-hand menu.
2 of 16
Select the letter M in the Databases by Title section.
Click on M and the scroll down until you see the Mergent Online® link:
Select the link and then select the link enter mergent online . You will then see the Search
page at Mergent Online®:
3 of 16
4.
Select data from Mergent Online®
Type in the company’s name or ticker symbol in the left-most data-entry box. For this example,
I’ll use Kellogg, which has a ticker symbol of K:
4 of 16
You will now be asked to indicate which company or companies you want to analyze. Check the
box for Kellogg Co.: 2
Clicking on the company’s name produces the Company Details, Synopsis page:
For financial data on Kellogg, selecting the tab “Company Financials” produces the default data of
3 years of balance sheet data:
2
You will sometimes have a choice if there is more than one company with the same ticker – which
happens when both a U.S. and Canadian company have the same ticker symbol.
5 of 16
If you want all the financial statement data for as many years as are available, select “All
Sections” and “15 Years/Quarters” from the drop down boxes:
Once you “Refresh”, the screen provides the data requested:
6 of 16
5.
Download the data
Because you most likely do not want to type all that data in by hand, and because Mergent
makes the data downloadable, download the data by clicking on the Download to MS Excel
link. 3 Save it to a file that is named, by default, export.csv(or any name your would like). The
extension csv indicates that this is a comma separated file.
When opened, this file in Microsoft Excel, it really doesn’t look very good: 4
3
There are occasionally problem when trying to open the file from this request. To reduce the chance of an
error, simply save it as a file on your computer.
4
If all the text is in one column when you first open this file, select the first column and then Data > Text to
Columns > Delimited and then specify the comma as a delimiter.
7 of 16
But with a little “fixing-up”, it will be easy to use.
6.
Get the data ready in Microsoft Excel®
You will need to spruce this up by widening some of the columns. First highlight the columns you
want to widen, and then move one of the vertical borders to a highlighted column slightly to the
right:
Once you get the columns so you can see what’s going on, you can then manipulate the
worksheet:
8 of 16
One thing that is useful is to sort the columns by the date, oldest to most recent, so that you can
form ratios and graph time-series more easily. To sort the columns, first highlight the columns
(which in a 15-year spreadsheet is the set of columns from B through P), and then use Excel’s
“Data” “Sort” commands (generally located in one of the main menus at the top) to sort the data.
When you go to Data and then Sort, you see the following in Microsoft Excel 2003:
9 of 16
Or, in Excel 2007,
Select Options, which will produce the following box, from which you will select the option Sort
left to right. Depending on whether you have Excel 2003 or 2007:
Excel 2003
Excel 2007
10 of 16
The fiscal year ending dates are in Row 3 of the worksheet, so this is the Sort by element:
Excel 2003
Excel 2007
Select OK and you now have a sorted worksheet. You can save this as an Excel® worksheet,
which will make your analysis a bit easier (than working with a .csv file). Now you are ready to
calculate ratios and graph the ratios.
7.
Calculate ratios
There are many ways to structure the worksheets for ratio calculation using this data. I’ll show
you one way, but you may have other methods that you prefer.
Label the worksheet with the data as “data”. To change the label, go to the tab for the
worksheet (found in the lower left of your screen) and double-click it. Type in the new name.
Insert a new worksheet [Insert -- Worksheet] and label this liquidity.
11 of 16
Now you are ready to calculate ratios. Let’s calculate the current and quick ratios over time. To
do this, we will be using information contained in cells in the data worksheet, specifically rows 24
(current assets), 16 (inventories), and 55 (current liabilities).
I first copy the fiscal year end dates from the data worksheet to the liquidity worksheet. Our
formulas in the liquidity worksheet will refer to these rows in the data worksheet. We do this
using the reference “data!” before each cell reference. For example, the formula for the current
ratio is current assets divided by current liabilities, which in the worksheet that we downloaded
refers to elements in row 24 divided by elements in row 56: e.g., for the first year, the cell
formula for the current ratio is data!B24/data!B56 and the formula for the quick ratio is
=(data!B24-data!B16)/data!B56.
So far, this is what you will have:
Copy the formulas in cells B4 and B5 across through P4 and P5 (this is a straight “copy and
paste” because these are formulas and the columns are automatically adjusted from B to the
appropriate column. Once you copy and paste, you have the current and quick ratios for all
fifteen years.
You can repeat this procedure for all the ratios that you want to calculate. You can make one
worksheet for each type of ratio, or you could have one large worksheet with all the ratios.
8.
Graph the ratios
It is very effective to look at financial ratios over time because trends are very important in
determining the future operating performance and condition of a company. Therefore, we would
like to graph these liquidity ratios over time. I’ll show you how to create one graph that shows
both ratios over time.
Select the data that you want to graph: highlight the data using the cursor (left mouse button
and drag) and then “Insert” “Chart” from the Excel menu. You will then get a choice of types of
12 of 16
charts. For a time series of ratios such as these, you can choose either a column or a line graph.
For example, choose a Column chart.
In Excel 2003, choose Next, which allows you to select the x-axis – which is very important for a
quality presentation. Select the Series tab. 5
In Excel 2007, Design > Select Data and then select the data using the Edit link for the
Horizontal Axis Labels:
5
Note: if you did not grab the ratio titles from the worksheet before doing the Insert -- Chart, you can
now either type in the name of the series, or click on the worksheet icon and then click on the cell that
contain the name.
13 of 16
Click on the worksheet icon in the Category(X) axis labels: box. Then use the Chart Wizard to
select the labels. In Excel 2003:
In Excel 2007:
Highlight the dates that you want to include in the X-axis (which, in this example, are found in
cells B3 through P3) and then click on the worksheet icon, resulting in, for Excel 2003:
14 of 16
Or, in Excel 2007:
Once you click on “Next” it is your opportunity to make the chart interesting. Add titles, remove
gridlines, insert a legend at the top, etc.. You can do what you would like, but remember you
need to communicate clearly.
Once you specify these options (available at the different tabs) and then click on Next, you then
are asked where you’d like the chart – on the same worksheet as the ratios or as a separate
worksheet:
15 of 16
The graph does not look impressive at this point, but that is because you haven’t customized it as
yet – it is basically a default-styled chart. With a little fixing up using the Format functions, you
can produce a chart such as: 6
1.4
1.2
Current ratio
Quick ratio
1.0
0.8
Ratio
0.6
0.4
0.2
12/30/2006
1/1/2005
12/31/2005
12/27/2003
12/28/2002
12/31/2001
12/31/2000
12/31/1999
12/31/1998
12/31/1997
12/31/1996
12/31/1995
12/31/1994
12/31/1993
12/31/1992
0.0
Fiscal year end
Source: Mergent Online
6
If you want to insert the chart into your write-up, you simply select the chart and copy it [left
click the outer area of the chart, then Edit – Copy. When you want to insert the chart into your
paper, then Paste-Special and then select Microsoft Excel Chart Object.
16 of 16