Assume that Chemco Corporation is engaged in the manufacture and distribu tion of a variety of chemicals.

Question:

Assume that Chemco Corporation is engaged in the manufacture and distribu¬

tion of a variety of chemicals. In analyzing the financial statements of this corpo¬

ration, why would you want to refer to the ratios and other measurements of companies in the chemical industry? In comparing the financial results of Chemco Corporation with another chemical company, why would you be inter¬

ested in the accounting procedures used by the two companies?

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