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Question 5.KC.4: A company with ratios that match the industry average is in ...

A company with ratios that match the industry average is in _______ shape.
a. Poor.
b. Average.
c. Great.
d. Impossible to tell.

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a. Incorrect. Poor cannot be correct because a company that matches the averages is at least as good as the average company in the industry.
b. Correct. Industry averages are not goals, they are averages. So a company that matches the averages is “average.”
c. Incorrect. A company that matches industry averages is not in great shape, they are average within the industry.
d. Incorrect. If a company matches the averages, the company is simply average.

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