A limitation of comparing a company's performance against actual results of last year is that:

Question

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Past results can contain inefficiencies of the past year which may not be relevant or applicable in the current year. Additionally, external factors such as changes in the market or economy can have a significant impact on a company's performance from year to year, making past performance an unreliable benchmark for future success. Therefore, it is important to not only compare a company's performance to past results but also to industry standards and competitors' performance to gain a more accurate understanding of its current standing.

A Limitation of Comparing a Company's Performance Against Actual Results