The benefits of comparing a firm’s current financial information with information for previous accounting periods, with industry averages and with financial information for competitors. Introduction: An accounting period, likewise termed as a reporting period, is the measure of time secured by the financial statements. Generally, it is the time period of activities that are abridged in the financials.

Question

Why is it so important to compare a firm's financial statements with those of previous years, those of competitors, and the average of all firms in the industry in which the firm operates?

Answer 1

Question

Chapter 15.8B, Problem 1CC

Summary Introduction

To determine: The benefits of comparing a firm’s current financial information with information for previous accounting periods, with industry averages and with financial information for competitors.

Introduction: An accounting period, likewise termed as a reporting period, is the measure of time secured by the financial statements. Generally, it is the time period of activities that are abridged in the financials.

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