To determine the financial condition of an existing business, it is necessary to compare ______ with ______ to identify where costs can be reduced or more money is needed.
A) operating ratios; fiscal averages
B) operating ratios; industry averages
C) expense ratios; fiscal averages
D) expense ratios; industry averages

Question

Quizplus · Accepted Answer

Operating ratios compared with industry averages provide insights into a business's financial health by highlighting areas of strength and weakness relative to peers, guiding decisions on cost reduction and investment.

To Determine the Financial Condition of an Existing Business, It