The most meaningful basis for comparing operating ratios is:
A)other companies of similar size in the same industry.
B)companies within the neighborhood.
C)major corporations in the same industry.
D)all publicly traded companies.

Question

Quizplus · Accepted Answer

Comparing operating ratios with other companies of similar size in the same industry is the most meaningful basis because it provides a more accurate benchmark to evaluate a company's financial performance. Companies within the same industry are likely to have similar operating conditions, risks, and opportunities, making it easier to compare the company's operating ratios against its peers. Moreover, comparing with companies of the same size can provide a more appropriate comparison as larger companies may have different operating ratios than smaller ones.

The Most Meaningful Basis for Comparing Operating Ratios Is