Asked by Ahmad Ahmadzai on Jul 09, 2024
Verified
An analytical tool that measures a company's performance against a predetermined standard is a/an
A) benchmark comparison analysis.
B) profitability analysis.
C) time-series analysis.
D) common size statement.
Analytical Tool
Instruments or methodologies used to analyze or interpret data to make decisions or solve problems.
Benchmark Comparison
The process of comparing business metrics or performance against a standard or set of best practices to evaluate relative performance.
Profitability Analysis
Evaluation of a company's ability to generate earnings compared to its expenses over a specific period.
- Grasp the concept and application of different types of financial analyses such as benchmark comparison, time-series, and cross-sectional analyses.
Verified Answer
DP
Dhwani PawarJul 15, 2024
Final Answer :
A
Explanation :
Benchmark comparison analysis is a tool that compares a company's performance with that of its competitors or industry standards. It enables a company to identify strengths and weaknesses, and to make necessary changes to improve performance. Profitability analysis, time-series analysis, and common size statement are also analytical tools, but they do not involve comparing a company's performance against a predetermined standard.
Learning Objectives
- Grasp the concept and application of different types of financial analyses such as benchmark comparison, time-series, and cross-sectional analyses.