Before undertaking ratio analysis, a prudent first step is to

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Before conducting ratio analysis, it is important to determine who the intended audience is and what their specific needs are. This will help ensure that the ratios chosen are the most relevant and useful for the target user. Assembling the necessary information and reviewing the economic and competitive environment are also important steps in conducting ratio analysis, but they are secondary to identifying the target user and their needs. The choice between trend analysis and benchmark analysis will come later in the process.

Before Undertaking Ratio Analysis, a Prudent First Step Is to