When Comparing Entity Financial Ratios with Industry Ratios

question 18

Multiple Choice

When comparing entity financial ratios with industry ratios:

• A)it should be assumed that the data result from the consistent application of alternative accounting methods.
• B)relative values at a point in time may not be significant.
• C)the trend of entity ratios should be compared to the current year's industry ratio.
• D)entity ratios should not be compared with industry ratios.

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Definitions:

Florida

A southeastern U.S. state known for its beaches, theme parks, and as a popular destination for retirees.

Oklahoma

A state located in the south-central region of the United States.

Whig Party

A political party in the United States (1834–1856) that opposed the policies of President Andrew Jackson and the Democrats.