Which of the following is not a method of "benchmarking"?
A) Conduct an industry group analysis.
B) Utilize the DuPont system to analyze a firm's performance.
C) Evaluating a single firm's performance over time.
D) Identify a group of firms that compete with the company being analyzed.
Answer: B
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FIN202 Chapter 4
- There are those that believe that the analysis of financial statements has limitations. Which of the statements below would qualify as a limitation of financial statement analysis?
- Why is the quick ratio considered by some to be a better measure of liquidity than the current ratio?
- Which of the following is a benefit of a common-size income statement?
- Limitations of ratio analysis include all but
- Peer group analysis can be performed by
- Which one of the following statements about trend analysis is NOT correct?
- Which one of the following is NOT an advantage of using ROE as a goal?
- Which one of the following is a criticism of equating the goals of maximizing the ROE of a firm and maximizing the firm's shareholder wealth?
- The DuPont equation shows that a firm's ROE is determined by three factors:
- Which one of the following statements is NOT correct?
- For a firm that has both debt and equity,
- For a firm that has no debt in its capital structure,
- Coverage ratios, like times interest earned and cash coverage ratio, allow
- Which one of the following statements is NOT correct?
- If firm A has a higher debt-to-equity ratio than firm B, then
- Which one of the following statements is correct?
- One of the following statements is NOT true of asset turnover ratios.
- Which one of the following statements is NOT true?
- All but one of the following is true about the inventory turnover ratio.
- All else being equal, which one of the following will decrease a firm's current ratio?
- Which one of the following does NOT change a firm's current ratio?
- All but one of the following is true about quick ratios.
- Which of the following is NOT true of liquidity ratios?
- Which of the following is true of ratio analysis?
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