Benchmarking Involves Computing Financial Ratios of an Industry Leader and Comparing

question 73

True/False

Benchmarking involves computing financial ratios of an industry leader and comparing those ratios with one's own firm.

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Definitions:

Present Value

A calculation that determines the current worth of a future sum of money or stream of cash flows given a specified rate of return.

Distributable Cash Flows

The amount of cash flow available to be distributed to security holders, often used in the context of REITs and master limited partnerships.

Cash Flow Assessment

The evaluation of how well a company generates cash to pay its debt obligations and fund its operating expenses.

Credit Risk

The risk that a borrower will default on any type of debt by failing to make required payments.