The most effective method of directly evaluating the financial performance of a

ID: 2739025 • Letter: T

Question

The most effective method of directly evaluating the financial performance of a firm is to compare the financial ratios of the firm to:

those of the largest conglomerate that has operations in the same industry as the firm.

the average ratios of all firms within the same country over a period of time.

the average ratios of the firm’s international peer group.

those of other firms located in the same geographic area that are similarly sized.

the firm’s ratios from prior time periods and to the ratios of firms with similar operations.

The firm's ratios from prior time periods and to the ratios of firms with similar operations.

for evaluation of the firms performance, one of the most effective method is the ratio analysis.

comparing financial ratios of the firm to those of the others firms who have similar operations.

comparing current ratios from prior time periods

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