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2 years ago

Why is it misleading to compare a company’s financial ratios with those of other firms that operate within the same industry?

1 answer:

3 0

Comparing financial ratios of companies within the same industry may be misleading because some companies may have investments in other industries that could distort the comparison.

Why do small business owners compare their ratios to other firms in the same industry?

Ratios can highlight trends in specific industries and establish benchmarks for measuring the performance of all industry participants. Small businesses can compare their success to the performance of the industry as a whole by using industry benchmarks to develop organizational strategies.

Why is it complicated to compare a given ratio of two companies operating in different sectors industries?

It could be necessary to compare various divisions to various industry averages. Very large corporations may be made up of various divisions that produce various goods or provide various services. To make ratio analysis meaningful, distinct industry averages must be employed for each respective division.

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You might be interested in

What segment of the foodservice industry is characterized by limited menus, fast service, and modest prices?

Nana76 [90]

The segment of the food service industry is characterized by limited menus, fast service, and modest prices in Quick-service restaurants.

<h3>What is meant by the food service industry?</h3>

Any business that serves meals to customers outside of their homes falls under the umbrella of the food service industry. This comprises eating establishments, takeout businesses, cafeterias, university dining halls, catering and vending businesses, inns, and motels, as well as rehabilitation and retirement facilities.

An essential component of the American economy is the food service sector. These businesses depend on food service managers (FSMs) to manage expenses, maintain client satisfaction, and guarantee efficient operations on a daily basis.

Commercial food service operations' major objectives are to serve customers food and drinks for a profit and produce satisfying guest experiences. Fast-food and full-service restaurants, pubs and nightclubs, catering and banquet facilities, and outlets for recreation and leisure are among these businesses.

Quick-service restaurants are a subset of the food service sector that are distinguished by small menus, quick service, and affordable rates.

To learn more about food service industry refer to:

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4 0

2 years ago

Several years ago, The Wall Street Journal reported that the winner of the Massachusetts State Lottery prize had the misfortune

lorasvet [3.4K]

Answer:

the present value of the annuity = $4,523,638

Explanation:

this is an ordinary annuity:

annual payment = $9,420,713 / 20 = $471,035.65

number of periods = 19 periods

interest rate = 8%

therefore, the present value annuity factor = 9.6036

the present value of the annuity = $471,035.65 x 9.6036 = $4,523,637.97 ≈ $4,523,638

4 0

3 years ago

Consider these long-term investment data:

Lemur [1.5K]

Answer:

${\large{\red{\mapsto{\maltese{\underline{\green{\boxed{\green{\underbrace{\overbrace{\orange{\pmb{\bf{answer:}}}}}}}}}}}}}}$

N = 10

N = 10PMT = 0

N = 10PMT = 0PV = 84.49

N = 10PMT = 0PV = 84.49FV = 100

N = 10PMT = 0PV = 84.49FV = 100R = Rate(10,0,84.49,-100,0) = 0.017 = 1.7%

N = 10PMT = 0PV = 84.49FV = 100R = Rate(10,0,84.49,-100,0) = 0.017 = 1.7%b. Yield = 0.02 per quarter = 0.08 per year

N = 10PMT = 0PV = 84.49FV = 100R = Rate(10,0,84.49,-100,0) = 0.017 = 1.7%b. Yield = 0.02 per quarter = 0.08 per yearcontinuous rate = ln(1+0.08) = ln(1.08)...

7 0

3 years ago

3) When there are more substitutes for a product, the ________ for the product is ________. A) demand; less price elastic

balu736 [363]

Answer:

Explanation:

When there are more substitutes for a product, the demand for the product is more price elastic. The implication of this is that the demand of such product will drop when there is increase in it price because people can get another product which will play the same role with the previous at a lesser price. Hence, the demand for the product vis more price elastic.

6 0

3 years ago

In January of last year, Newton Inc. sold 15,000 shares of its own common stock for $180,000. Ten months later, Newton repurchas

aleksklad [387]

Answer: the correct answer is (A) Both a $180,000 cash inflow and a $55,000 cash outflow should be recorded in the financing section because both transactions involve stockholders' equity items, and all cash flows must be reported gross.

Explanation:

The important thing here is that all cash flows must be reported gross.

8 0

4 years ago