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What are the different benchmarks against which Ratios are compared?
The different benchmarks against which ratios are compared as follows:
- Intra-firm comparison: in which ratios of one organization may be compared with the ratio of the other organization for several years.
- Inter-firm comparison: in which ratios of one organization may be compared with the ratios of other organizations in the same industry.
- Comparison of actual performance with the standard performance: The ratios of an organization may be compared with the standards set in the industry which are the thumb rule for the evaluation of the performance.
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