Читать книгу Entrepreneurial Finance - Robert D. Hisrich - Страница 49

While the time-series approach compares the firm to itself at different points in time, the cross-sectional benchmark approach compares the firm to two or more companies at a specific point in time. Unless it's a monopoly, a firm does not operate in isolation; it operates in a competitive environment. If the firm cannot operate with the same efficiency as its competitors, it risks having financial difficulties and eventually being insolvent. By comparing the financial ratios of the firm against other firms or the industry, investors and management can get a better idea of what management's and the firm's strengths and weaknesses are in relation to its peers.