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.

---

Definitions:

Resale Restrictions

Legal or contractual limitations imposed on the resale of products, often to maintain market order or protect brand integrity.

Distributors

Entities involved in the process of making goods available for consumption by dispersing them from points of origin to end-users.

Channel Captain

A channel captain is a dominant leader within a distribution channel, wielding the authority to influence activities and terms within the channel, such as pricing and shelf space allocation.

Channel Conflict

Refers to disagreements among marketing channel members on goals, roles, or rewards, such as between manufacturers and retailers.