What Are Industry Ratios?

The standard ratio is the ratio used to evaluate the completion of the actual ratio through careful investigation, analysis, and calculation. There are four types of standard ratios: (1) Absolute standard. These are the standards that are generally accepted and are applicable in any unit, at any time, or at any time during the economic cycle. (2) Historical standards. A continuous set of standards is generated by the enterprise from the actual completion of various past relevant ratios. These standards have certain comparability in measuring the work of an enterprise, and can help managers determine the status of specific aspects of the enterprise. (3) Industry standards. Refers to the industry average. By comparison with industry standards, it can reflect the degree of advancement or backwardness of the enterprise in the industry. (4) Standards established within the enterprise. It is the goal of enterprise establishment. ^[1]