Which of the following is true of benchmarking?
A) It is an analysis in which a firm's ratio values are analyzed to project the fundamental values of the assets for upcoming years or business cycle.
B) It is an analysis in which a firm's ratio values are compared with those of a key competitor or with a group of competitors that it wishes to emulate.
C) It is an analysis in which a firm's financial performance over time is evaluated using financial ratio analysis.
D) It is a financial statement analysis technique which combines cross-sectional and time-series analyses.

Question

Quizplus · Accepted Answer

Benchmarking is a process in which a firm compares its performance with that of its competitors or firms it wishes to emulate. This is typically done by comparing financial ratios such as profitability, liquidity, and efficiency ratios. Option A refers to fundamental analysis, option C refers to trend analysis, and option D refers to ratio analysis techniques but does not specifically describe benchmarking.

Which of the Following Is True of Benchmarking