Benchmarks Are Required to Evaluate a Company's Performance

question 82

True/False

Benchmarks are required to evaluate a company's performance.Benchmarks are necessary when interpreting a company's financial ratios.These benchmarks may be the company's own results for prior years,the results of competitors,or an average for the industry.

---

Definitions:

Inventory Turnover

A measure of how many times a company's inventory is sold and replaced over a specific period.

Cost of Goods Sold

The direct costs attributable to the production of goods sold in a company, including materials and labor.

Average Inventory

A measure used to estimate the value of inventory over a certain period by averaging the beginning and ending inventory.

Ending Inventory

The total value of goods available for sale at the end of an accounting period, crucial for calculating cost of goods sold.