One of the first steps in arriving at a firm's forecasted financial statements is a review of industry-average operating ratios relative to these same ratios for the firm to determine whether changes to the ratios need to be made.

Question

Quizplus · Accepted Answer

This statement is true. A review and comparison of industry-average operating ratios and a firm's operating ratios is a crucial step in developing forecasted financial statements. This analysis helps to identify where the firm stands in relation to its peers and whether it needs to make changes to improve its financial performance.

One of the First Steps in Arriving at a Firm's