Which of the Following Comments Best Describes the Appropriate Application

question 38

Multiple Choice

Which of the following comments best describes the appropriate application of benchmarking to a medium-sized Australian company with a range of products and services specifically designed for local conditions and demands?

• A) In the absence of a valid basis for comparison, benchmarking is unlikely to be informative in this case.
• B) Benchmarking should be based on world best practice for the nearest equivalent organisation.
• C) Efforts should be made to compare particular activities and processes with similar processes elsewhere, allowing for differences in the business environment.
• D) The use of benchmarking may inhibit originality in meeting the special features and unique needs of the firm's market.

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Definitions:

Earnings per Share

This refers to the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of the company's profitability.

Liquidity

The ability of an asset to be quickly converted into cash without significant loss in value, essential for assessing the financial health of businesses.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned into cash over a period.

Price-Earnings Ratio

A valuation metric that compares a company's share price to its earnings per share, used to gauge if a stock is over or under-valued.