A firm would like to know its competitive position about the financial standing vis-à-vis
its major competitors and the industry group. With the help of Inter-Firm Comparision
(IFC) the firm can know such position in relation to its competitors or its industry group.
IFC means a comparative analysis of financial performance of two or more firms organized
generally by the Trade Association with the objective of providing information regarding
the competitive position of participating companies to improve the profitability and
productivity of those companies.
This analysis is made at a given point of time. It, thus,
focuses attention on both the areas of strength and weakness of each of the member
organizations at a particular point of time. Center for Inter-Firm Comparison (CIFC),
a non-profit making organization, established by the British Institution of Management
(BIM) has aptly explained this aspect as, “Inter-firm comparison is concerned with the
individual firm, its success and the part played by the management in achieving it. The
end product of a properly conducted inter-firm comparison is not a statistical survey but
the flash of insight in the mind of the Managing Director of a firm, which has taken part
in such exercise.
The results of this give him an instant and vivid picture of how his firm’s
profitability, its costs, its stock turnover and other key factors affecting the success of a
business compared with those of the other firms in the industry.”
The main objective of this study is to analyze the relevance of value added concept of
income in place of traditional concept of income in IFC. For this purpose, this study uses |
