Running head: Standard Industrial Classification: How are you doing compared to others?

Standard Industrial Classification: How are You doing compared to others?

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Introduction:

Standard Industrial Classifications (SIC) are numerical codes which are of 4 digits in

total assigned by the United States government. It’s mainly used to classify the industries to

which the companies are associated with mainly as per their business operations. Companies use

this information to analyze, facilitate the presentation relating to establishments, and examine

economic progress in different sectors.

Discussion:

The objective of this ramification is the establishment. An establishment is materially an

economic unit for the place where the business or the services are performed. Companies use

standard industrial classifications to find their old and existing buyers and to find the potential

ones according to the industry. These codes can be used to categorize the companies for tax-

related concerns. Banking and non-banking organizations use this sic code to find out which

industry any company belongs to when considering credit extension (libguides.du.edu, 2021). In

different campaigns sic codes can be used to create marketing strategies and campaigns to reach

out to various potential customers. Different companies can access the information to get an idea

of the competition in a particular sector by searching for those companies by sic codes and also

can use peer companies’ financial statements for ratio analysis purposes to determine what is the

average ratio of similar companies in the same industry. The same also can be used as a

benchmark to improve the financials and to find out if peer companies’ management is capable

enough to maintain a healthy ratio and a healthy track record. Now last but not least, businesses

can also use sic codes to find various contracts by the government.
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Conclusion:

The establishment notion is smooth to perform when distinct facilities have individual

and stable locations. SIC procedure is a detailed structure on classification and economic

activities based on the unkind statistical practice of classification. Givers and users of this data

for different decision-making should be aware of the principles of the standard industrial

classifications, its weaknesses, and its strengths when trying to interpret and develop the

establishment-related data.
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References:
libguides.du.edu (2021) Business Plan Research: Industry Classification – NAICS and

SIC, retrieved from: libguides.du.edu [ retrieved on: 16th November 2021]