ABSTRACT
From a strategic perspective, a company needs to be assessed within the context of its particular industry. Information is most helpful when compared to industry averages. For example, if you determine that your company is growing at 25 percent per year, that might be good news … unless your competitors are growing at 125 percent per year! Likewise, if your company's debt to equity ratio is 50 percent (that is, 50 percent of the company's financing comes from debt) and your competitors’ average is 20 percent, it might be worth taking a look at how your competitors are being financed.
