Peer Group

Peer groups were developed to allow evaluation comparisons among similar businesses with respect to geographies, industries, and business sizes. These groupings were devised based on four-digit SIC groupings within eight sales ranges and within zip code areas. The peer groups contain between 250 and 1,500 businesses in an area.

The sales ranges of these groupings include the following:

Group 1: < $100 thousand

Group 2: $101 – 250 thousand

Group 3: $251 – 500 thousand

Group 4: $501 thousand – $1 million

Group 5: $1.01 – 2.5 million

Group 6: $2.501 – 10.0 million

Group 7: $10.01 – 25.0 million

Group 8: > $25 million

Overall, 50,000 peer groups were developed. Risk scoring and distributions were developed for each of these peer categories on a national level so that individual businesses can be compared to their appropriate norms.

Note that the industry and Z-Score distributions are based on a national distribution level for the industry and sales range, so they have similar peer scores for national and individual groups.

The relationship of a peer group to its companion groups provides an indication of the consistency of these groups nationally. The greater the consistency among these groups, the more predictable the risk of a specific member is regarded.