Comparing this to that – Benchmarking financial performance with ratios

Description

Abstract: Benchmarking with financial ratios allows manufacturers to break their operations into individual segments to measure effectiveness against past performance, company goals and industry standards. It can provide insight into which areas of a business are strong and which need improvement. This article discusses such commonly used ratios as debt-to-assets, return-on-assets and return-on-equity, along with a number of others, and discusses the pros and cons of benchmarking. A sidebar discusses the best ratios to study before applying for a loan.