Benchmark Analysis

Financial ratios can be used in benchmark analysis, in which the ratios of a specific firm can be compared to a benchmark, such as the industry average or an ideal target or goal determined by management. Data for industry average financial ratios are published by a number of organizations, such as Dun & Bradstreet, Robert Morris Associates, Financial Dynamics, Standard & Poorís, and the Federal Trade Commission. These information sources are readily available at most libraries.