Yard stick required in ratio analysis, Finance Basics

Yard Stick Required in Ratio Analysis

1. Past performance of the company

The company's previous performance past ratio is needed to gauge or measure the company's presentation and in performance in particular changes whether good favorable, improved, even or same worse such the past.  Such comparison is rather then required to interpret the company's performance bearing in mind the factors such influenced the past and present performances.

2. Average industry ratios

These are helpful as they signify the average performance of various companies in a specified industry that is it gives the minimum presentation of a number of companies in a provided industry. These ratios are helpful in so far as to enable such analyst to create a reasonable comparison of the company's performance vis-à-vis another companies in the same industry.  Though, for this yardstick to be helpful the term average must include those companies that are not extremely.  That is very weak and very strong companies - that should be excluded to arrive on industry average figures.

3. Ratio of successful companies

Practically if the company can get figures of competitors who such are leading in the market so as to gauge to enable its performance against better performance.  Still this information is hard to get and sometimes it calls for private investigators as Private Eyes Ltd.

4. Ratio of budgeted performance

These are compared along with actual investigations and performance ratios are made of any unfavorable variance that should be explained.

Posted Date: 1/30/2013 1:34:26 AM | Location : United States







Related Discussions:- Yard stick required in ratio analysis, Assignment Help, Ask Question on Yard stick required in ratio analysis, Get Answer, Expert's Help, Yard stick required in ratio analysis Discussions

Write discussion on Yard stick required in ratio analysis
Your posts are moderated
Related Questions
Market For Funds Market for Funds and Financial Institutions in Middle Asia 1. Financial markets refer to an elaborate system of the financial institution and arrange


Ask questioSay that a buyer of bonds values good bonds at $500 and values bad bonds at $250. Sellers of both good and bad bonds value them at $350. If the fraction of good sellers

Management of Sole Proprietorship  In sole proprietorship the owner is usually in charge of day to day running of the business. If the business is large he may give some duties

Lease Finance Leasing is a contract between one party called lessor as owner of asset and other called lessee whereas the lessee is provided the right to utilize the asset as

John has just inherited $50,000 from his Uncle Ted. John is currently studying his Bachelor of Accounting degree at CQUniversity part-time and has three (3) years of study remainin

Turnover Ratios Turnover Ratios/efficiency/asset management ratio Turnover ratio shows the efficiency along with that the firm utilized the asset or resources at its dispos

I need to understand a practice question for exam, but I only have a partial solution. I need a more detailed solution, so can understand how to arrive at the answer. The problem

After read all the available information carefully, prepare a two page (double-spaced) essay and answer the following questions: Assume that we have the following data: C=100+0.50Y

the real risk-free rate of interest is 4%. inflation is expected to be 2% this year and 4% during the next 2 years. assume that the maturity risk premium is zero. what is the yield