How do you compare a company to industry benchmarks?

Compute the company's ratios, find its Damodaran industry group in the table, then compare against the industry figure — not the market average. Check the trend over 3–5 years too: direction matters as much as level.

Industry Benchmarks and Financial Ratios (2026) — 94 Sectors

Q: What are industry benchmarks in financial analysis?

Industry benchmarks are the typical values of financial ratios — margins, returns, liquidity, leverage — for companies in the same sector. They give context: a 12% net margin is strong for a grocery chain (industry average 1.3%) but weak for enterprise software (25.5%).

Q: Where can I find industry financial ratios?

The most widely used free source is NYU Stern professor Aswath Damodaran's dataset, updated every January. This page republishes his January 2026 margins and ROE tables for all 94 US industries, with search and sorting built in.

Q: What is a good current ratio by industry?

Most industries sit between 1.2 and 2.0. Retail and groceries run lean (1.0–1.4) because inventory turns fast; software and services typically hold 1.8–3.0. Below 1.0 signals potential liquidity stress in almost any sector.

Q: Why is my industry's average net margin negative?

Some sectors — biotech, renewables, consumer electronics — contain many pre-profit companies. Averages get dragged down by them. In that case compare operating margins of the profitable subset, or use revenue growth instead.

What counts as "good" depends entirely on the industry. Enterprise software companies keep a 25.5% net margin; grocery retailers survive on 1.3%. These tables give you the real numbers for every sector — so you judge a company against its actual peers.

Full benchmark table

Banks & insurers: Damodaran's "gross margin" for financials reflects interest income accounting, so ignore that column for banks — net margin and ROE are the meaningful ones. Sort by clicking any column header.

How to use benchmarks — with a real example

Say you're looking at a mid-cap grocery chain with a 2% net margin and you're tempted to call it "barely profitable." Now check the table: Retail (Grocery and Food) averages 1.3% across 15 US-listed grocers. Suddenly 2% looks like good execution, not mediocrity.

Flip it around: a software company posting a 12% net margin sounds fine — until you see Software (System & Application) averages 25.5%. Same number, opposite verdict. That is the entire point of benchmarks.

Grocery at 2% net marginIndustry avg 1.3% → above average. Thin margins are the business model; efficiency is what separates winners.

Software at 12% net marginIndustry avg 25.5% → half the peer average. Either the company is worse at execution, or margins are temporarily depressed — find out which.

The full routine takes five minutes:

Pick the company's industry group from the table (closest match — Damodaran groups are specific, use them).
Compute the company's ratios for the last 3–5 years, not just the latest year.
Place each ratio against the industry figure and note where it sits.
Track the direction: improving toward the top of the range beats sitting at the top and sliding.
Then turn benchmarks into a valuation check with the stock valuation calculator.

What the data says (January 2026)

Highest net margins: Precious Metals 28.6%, Semiconductor 30.5%, Software (System & App) 25.5%, Tobacco 26.7%, Money Center Banks 28.9%.
Thinnest margins: Grocery 1.3%, Auto & Truck 1.3%, Auto Parts 0.7%, Healthcare Support Services 1.3% — volume businesses where turnover, not margin, drives returns.
Negative on average: Biotechnology (−5.0% net margin across 496 firms — most are pre-profit), Chemical (Basic) −3.7%, Renewables −10.8%. Negative industry averages mean "many unprofitable firms," not "bad business."
Whole market reference: across 5,994 firms, average gross margin is 37.8%, net margin 9.7%, ROE 17.2%. Never use these to judge a single-industry company — that's the benchmarking mistake this page exists to fix.

5 mistakes people make with benchmarks

Comparing to the market average. The 37.8% average gross margin mixes software with steel. Use the industry row.
Using the wrong industry group. Damodaran splits 94 ways for a reason: Software (Internet) nets −0.9% while Software (System & App) nets 25.5%. Pick the closer business model, not the similar-sounding name.
Reading financial-sector margins literally. For banks, "gross margin" is an accounting artifact. Use net margin, ROE and capital ratios instead.
Ignoring the loss-makers. In biotech or renewables the average is dragged by pre-profit firms. Compare the profitable subset, or use a different lens entirely.
One-year snapshots. A single year can be an outlier (energy in a price spike). Three to five years tells the truth.

The ratios behind the table

Gross margin

(Revenue − COGS) ÷ Revenue

Operating margin

Operating income ÷ Revenue (pre-tax, unadjusted)

Net margin

Net income ÷ Revenue

Return on equity (ROE)

Net income ÷ Shareholders' equity

Want liquidity and leverage ratios too (current ratio, debt-to-equity, interest coverage), with formulas and healthy ranges on one page? Grab the financial ratios cheat sheet.

Turn a benchmark into a fair value in 30 seconds

Pair the industry P/E from average P/E ratio by industry with the company's EPS — the calculator does the rest.

Open the calculator →

Frequently asked questions

What are industry benchmarks in financial analysis?

Typical ratio values — margins, returns, liquidity, leverage — for companies operating in the same sector. They turn "is 12% net margin good?" into "is 12% net margin good for this kind of business?"

Where can I find industry financial ratios?

The standard free source is NYU Stern's Damodaran dataset, refreshed every January — that's what powers the table above. University library guides (like the one in Berkeley's BRASS collection) and paid screeners are the other common options.

What is a good current ratio by industry?

Most sectors sit between 1.2 and 2.0. Fast-turning retail and groceries run leaner (1.0–1.4); software and services hold more (1.8–3.0). Under 1.0 is a liquidity flag nearly everywhere. Current ratio isn't in Damodaran's margins file — compute it from the balance sheet and judge it against these ranges.

Why is my industry's average net margin negative?

Pre-profit companies. Biotech (496 firms) and renewables average negative net margins because many members burn cash by design. Compare the profitable subset or switch metrics.

How often is this data updated?

Damodaran refreshes every January; this page reflects the January 2026 update. Industry composition changes slightly each year as firms are re-classified.