For meaningful analysis, ratios are best compared with
A) historical company averages.
B) industrial averages.
C) historical and industrial averages.
D) no standard.

Question

Quizplus · Accepted Answer

Ratios provide important insights into a company's financial performance, but their interpretation is more meaningful when comparing them to historical and industry averages. Historical company averages help you to see how the company's performance has changed over time, while industrial averages provide insight into how the company's performance compares to its peers in the same industry. By comparing ratios to both historical and industry averages, you can get a better understanding of both the company's financial performance and how it stacks up against its competitors. Therefore, option C is the best choice.

For Meaningful Analysis, Ratios Are Best Compared with