To get a proper picture of the position of the organization, common-size statements and ratios should be compared to
A) the organization's future historical performance.
B) the leading competitor in the industry.
C) the financial performance of the overall U.S. gross domestic production (GDP).
D) the direct competitor least like the organization.
E) industry-wide average trends.

Question

Quizplus · Accepted Answer

Comparing common-size statements and ratios to industry-wide average trends provides a benchmark for the organization's performance against its competitors. This allows for a more accurate evaluation of the organization's position within the industry and can highlight areas where they may need to improve in order to stay competitive. Comparing to the other options listed would not provide as relevant or useful information for assessing the organization's position.

To Get a Proper Picture of the Position of the Organization