What does it mean to benchmark by industry? Why is this needed when conducting a financial ratio analysis?

What will be an ideal response?


Answer: By benchmarking to an industry, we mean that the firm's performance as measured by financial ratios should be compared to a benchmark such as its industry average ratio or its key competitor's ratios. This is needed because a ratio by itself has little meaning without some standard of comparison. For example, a student scores 80 out of 100 and believes this is slightly above average. The instructor informs the class that 82 was the highest score for all 50 students. The student who received an 80 now realizes (s)he performed better than just slightly above average.

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Land costing $140,000 was sold for $173,000 cash. The gain on the sale was reported on the income statement asother income. On the statement of cash flows, what amount should be reported as an investing activity from thesale of land?

a. $173,000 b. $140,000 c. $313,000 d. $33,000

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Which of the following is not a symptom of stress?   

A. Slurred speech B. Insomnia C. Hostility D. Alcohol abuse E. Heart attack

Business

The Norticon Group provides and manages computers and network systems for businesses and communities

Norticon sells its products through various means–it uses its sales force to sell to large customers and telemarketing to sell to smaller customers. The company also sells its products via the Internet. Briefly explain the marketing approach being used by the company.

Business

______ distractions occur when the channel through which the message is delivered obstructs our ability to receive the message clearly.

a. Situational b. Source c. Medium d. Bias

Business