What are the different benchmarks against which Ratios are compared?

What are the different benchmarks against which Ratios are compared?


The different benchmarks against which ratios are compared as follows:

- Intra-firm comparison: in which ratios of one organization may be compared with the ratio of the other organization for several years.

- Inter-firm comparison: in which ratios of one organization may be compared with the ratios of other organizations in the same industry.

- Comparison of actual performance with the standard performance: The ratios of an organization may be compared with the standards set in the industry which are the thumb rule for the evaluation of the performance.
Explain liquidity group ratios.
Liquid Ratio or Acid Test Ratio or Quick Ratio indicates the backing available to liquid liabilities in the form of liquid assets…
Explain turnover group ratios.
Fixed Assets Turnover Ratio,Current Assets Turnover Ratio indicates that the current assets are turned over in the form of sales…
Explain turnover group ratios.
Solvency Group: Under this group following ratios are calculated which indicates the long term financial prospects of the company…
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