A comparison of a firm's ratios with those of other firms in the same industry at the same point in time is called:
A)trend analysis.
B)comparative (benchmarking).
C)DuPont analysis.
D)sensitivity analysis.
E)cash flow analysis.

Question

Quizplus · Accepted Answer

Comparative or benchmarking analysis involves comparing a company's financial ratios with those of other companies in the same industry at the same point in time. This helps identify areas where the company may be underperforming or outperforming its peers and provides insights into ways the company can improve its financial performance. Trend analysis involves analyzing a company's financial ratios over time, DuPont analysis focuses on assessing a company's return on equity, sensitivity analysis involves examining how changes in different variables impact a company's financial performance, while cash flow analysis involves evaluating a company's cash inflows and outflows.

A Comparison of a Firm's Ratios with Those of Other