Benchmarking means comparing a company's financial results to:
A) industry standards or competitors.
B) its own results in prior years.
C) its budget for the coming year.
D) the expectations of the capital markets.

Question

Quizplus · Accepted Answer

Benchmarking involves comparing a company's financial results to those of industry standards or competitors. This helps a company to identify areas where it may be falling short and take steps to improve its performance. Comparing financial results to its own results in prior years or to its budget for the coming year may be useful for internal planning purposes, but it does not provide the same level of insight and context as comparing results to industry standards or competitors. Similarly, comparing financial results to the expectations of the capital markets is also not the same as benchmarking, as the expectations of the capital markets may be influenced by a range of factors beyond a company's financial performance.

Benchmarking Means Comparing a Company's Financial Results To