A comparison of a firm's ratios with those of other firms in the same industry at the same point in time is called:
A) trend analysis.
B) benchmarking.
C) DuPont analysis.
D) sensitivity analysis.
E) cash flow analysis.

Question

Quizplus · Accepted Answer

Benchmarking involves comparing a firm's ratios with those of other firms in the same industry at the same point in time to identify areas of strength and weakness. Trend analysis involves analyzing a firm's ratios over time, DuPont analysis involves breaking down return on equity into its components, sensitivity analysis involves analyzing the effects of changes in variables on a firm's financial statements, and cash flow analysis involves analyzing a firm's cash flows.

A Comparison of a Firm's Ratios with Those of Other