Financial Benchmarks Are Used to Assess Company Performance Against Industry

question 77

True/False

Financial benchmarks are used to assess company performance against industry standards but have few or no applications internally as firms evaluate individual business and product lines

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Definitions:

Current Ratio

The current ratio is a liquidity metric that measures a company's ability to pay off its short-term liabilities with its short-term assets.

Note Receivable

A written promise that amounts will be received by the person holding the note, usually involving interest.

Return Ratio

A financial metric used to measure the efficiency or profitability of an investment, calculated by dividing the gain (or loss) from the investment by its cost.

Total Assets

The sum of all assets owned by an entity, including both current and long-term assets, representing the total value of what the entity owns.