Benchmarking

Comparing a company's ratios against a chosen peer set, over several years, on a consistent basis.

Consistency is what makes it work. Every ratio has to be computed the same way for every company, from the filings themselves and not from a data provider. Why bother? Providers differ on definitions and on standalone versus consolidated figures, and they differ again on how they treat exceptional items.

The useful output is the pattern, more than the level: which company is best on each measure, whether the ranking is stable, and what the leader does differently.

Five to eight peers, five years, computed by hand once.