when performing ratio analysis over time be mindful of seasonality and how temporary fluctuations may impact month over month ratio calculations 
comparative ratio analysis can be used to understand how a company s performance compares to similar companies in the same industry for example a company with a 10 gross profit margin may be in good financial shape if other companies in the same sector have gross profit margins of 5 however if the majority of competitors achieve gross profit margins of 25 that s a sign that the original company may be in financial trouble 