You are the CEO of Company A and you are using an industry leader (Leader Company)for benchmarking. Company A is much smaller than Company B in terms of total assets and total sales revenue. You should compare the:
A)gross profit of Company A to the gross profit of Leader Company.
B)net income of Company A to the net income of Leader Company.
C)net sales of Company A to the net sales of Leader Company.
D)net income to net sales ratio of Company A to net income to net sales ratio of Leader Company.

Question

Quizplus · Accepted Answer

Comparing ratios like the net income to net sales ratio provides a relative measure of performance that accounts for size differences between companies, making it a more meaningful comparison.

You Are the CEO of Company a and You Are