Benchmarking can be applied to ratio analysis. How is this different from comparing a firm's ratios to industry averages over time?
A.) In benchmarking you compare your firm's performance to a previous "benchmarked" period and not industry averages.
B.) It creates a benchmark of numerous industries for comparison purposes rather than a single industry due to wild fluctuations within specific industries.
C.) It creates a benchmark that compares your firm to the best world-class competitors rather than an entire industry.
D.) It creates a benchmark by taking an average of a portfolio of industries over a specific time period, usually 5 years, rather than a single industry in a single year due to wild fluctuations within specific industries over short periods of time.
Answer: C