Financial ratios are used to compare a firm's performance over different time periods,compare the firm's performance to industry averages,and compare a firm's performance with

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Financial ratios are commonly used to compare a firm's performance with its competitors. By analyzing how a firm performs relative to its competitors, management can identify areas for improvement and make strategic decisions to increase profitability and market share. Comparing a firm's performance over different time periods can also be useful, but without benchmarking against industry averages or competitors, it may be difficult to determine whether a firm's performance is truly improving. Comparing a firm's performance to international firms, non-financial ratios, or overall business standards may also be useful in certain contexts, but none of these options are as directly relevant to assessing a firm's competitive position as comparing its performance to industry averages or competitors.

Financial Ratios Are Used to Compare a Firm's Performance Over