Question

in which scenario would benchmarking be least useful?
comparing financial ratios of a company in a secondary industry and a manufacturing industry
comparing financial ratios of a company in a primary industry and an extractive industry
comparing financial ratios of a company in an extractive industry and a tertiary industry
comparing financial ratios of a company in a tertiary industry and a service industry

Explanation:

Benchmarking is most useful when comparing entities in similar industries (with similar operational models, cost structures, revenue drivers). Extractive (e.g., mining) and tertiary (service - focused, e.g., consulting) industries have vastly different business models, financial drivers (e.g., capital intensity, revenue recognition, cost structures). In contrast:

• Option 1: Secondary (manufacturing - related) and manufacturing industries are more similar.
• Option 2: Primary (e.g., agriculture) and extractive (e.g., mining) are both resource - based, more similar.
• Option 4: Tertiary and service are essentially the same (tertiary is service - sector), so comparison is useful.

So comparing extractive and tertiary has the least useful benchmarking.

Answer:

C. Comparing financial ratios of a company in an extractive industry and a tertiary industry