Industry analysis, also called cross-sectional analysis or bench marking, is analyzing a corporation by comparing the financial ratios to those of a complete industry to work out how the corporate performs in comparison. Time periods are matched and industry average ratios are used for purposes of comparison. Industry analysis gives the financial manager a distinct picture of the corporate than analytic thinking. The corporate is compared to a sample of companies within the same industry instead of by period of time against itself. Industry analysis is efficacious because the financial analysts like William Letzer can get a minimum of a rough idea if the corporate is on the proper track.
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