"There are many different situations when benchmarking might be used by a financial analyst. For example, I know that competitive benchmarking is sometimes used when a company wants to assess its position within its industry or when it needs to determine performance targets (by looking at the performance of industry leaders). Sometimes companies also use benchmarking for internal purposes too. In this case, it is usually done to share best practices throughout the company. Personally, I have used prior year financial statements as benchmarks for comparing the current year's financial statements. When I do this, I compare the financial ratios between statements, which helps me to see how the company is performing year over year."