When using ratio data for comparison to other companies,analyst should:
A)not assume that all companies in the industry are in direct competition.
B)not interpret the data as a way of determining which companies will survive and outperform others.
C)only use data from one time period.
D)use industry averages,rather than individual companies,for the comparison.

Question

Quizplus · Accepted Answer

Ratio data should not be used to assume direct competition among companies in the industry, as different companies may have different business models, strategies, and market positions. Therefore, analysts should exercise caution and use additional information to assess the competitive dynamics and performance of individual companies.

When Using Ratio Data for Comparison to Other Companies,analyst Should