This discussion supports the following objective:

• Analyze the accounting for support department costs and allocations, including cost behavior and relationships, various cost models, budget creation, and managerial reports.

Financial statements are standardized documents regardless of the organization type or size. So how can someone compare "apples to apples" by analyzing financial statements? This is where ratio analysis comes into play. Read the article Using ratio analysis to compare different companies Links to an external site., which explains ratio analysis, then respond to the discussion questions.

• Explain how someone could compare profitability of two hospitals of different sizes.
• Are there limitations to ratio analysis? Describe any pros or cons of using ratio analysis as a comparative tool for analyzing financial statements of different organizations.

Article - Ratio Analysis of a Company: Comparing Companies' Financials (investopedia.com)