Financial analysis is only useful if it is measured relative to something else, such as past periods and similar entities in the same industry.

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Financial analysis is comparative in nature, and thus it is only useful when it is measured relative to something else, such as past periods or similar entities in the same industry. Comparing financial metrics over time helps identify trends and patterns, while comparing them with industry benchmarks enables a company to assess its performance relative to its competitors.

Financial Analysis Is Only Useful If It Is Measured Relative