__________ analysis allows the company to evaluate changes within the company and compare to other companies and industry standards.

a.) Ratio

b.) Liquidity

c.) Profitability

d.) Vertical

 

Answer:

a.) Ratio is the answer..

Ratios are used to compare companies in the same industry, since profit margins will vary widely from industry to industry.

Ratio analysis provides investors with tools to analyze a company's financial statements as it relates to risk, reward (profitability), liquidity , solvency, and how well a company operates.

Investors use ratios to evaluate companies and make comparisons between companies within an industry/vertical.