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what is the most effective way to compare the ratio of a company to its competitor?

what is the most effective way to compare the ratio of a company to its competitor?
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Answer #1

The Profitability ratios can be used to evaluate the company's financial viability and also essential in making a comparison of the business with the competitors in the industry. The net profitability ratio is computed as Net Income/Net Sales and acts as an effective way to know the business profitability to its competitor. The ratio can be compared for firms in the similar industry wherein the higher profit margin than its competitor indicates to be more effective, flexible, efficient, and able to accept on new opportunities

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