In addition to comparison with industry ratios, it is also helpful to analyze ratios using
A) future projections
B) historical data
C) only industry ratios provide valid comparisons.
D) trend analysis and historical comparisons.

Question

Quizplus · Accepted Answer

To gain a better understanding of a company's performance, it is useful to analyze ratios using trend analysis and historical comparisons. This enables analysts to observe any changes or patterns in the company's financial performance over time. Future projections are important, but they may not be accurate and can be influenced by external factors beyond the company's control. While comparing a company's ratios to industry averages can provide valuable insights, it is important to also consider historical data for a more comprehensive analysis.

In Addition to Comparison with Industry Ratios, It Is Also