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Investopedia (2007) cautions that âa little bit of background knowledge is necessary in order to make relevant comparisons when analyzing these ratios.â This is because some industries, namely retail, experience highs on a seasonal basis (i.e.- Christmas), which is why it would benefit a company more to have the last quarter of last year to the last season of this year...
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(Comparing first quarter to last quarter in the same year, at least in the retail industry, would prove moot because in such an industry, one should want to have a similar basis (like the Christmas season) to compare itself to).
Market ratios, as their name suggests, examines a companyâs market (investment) value...
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