Final answer:
To determine the financial performance of a company, we compare its performance in terms of financial ratios, financial statements, and stock market performance.
Step-by-step explanation:
When analyzing the financial performance of a company, we compare its performance in several ways:
- Financial Ratios: By calculating and analyzing financial ratios such as profitability ratios, liquidity ratios, and solvency ratios, we can assess a company's financial health and performance.
- Financial Statements: By reviewing the company's financial statements, including the income statement, balance sheet, and cash flow statement, we can gain insights into its revenue, expenses, assets, liabilities, and cash flows.
- Stock Market Performance: We can also evaluate a company's financial performance by looking at its stock market performance, such as the company's stock prices, market capitalization, and stock market indexes it is listed in.