What should be checked against the industry average for an individual expense ratio?

When evaluating an individual expense ratio, it is essential to check it against the industry average to gain insights into how a company is performing relative to its peers. Checking the individual expense ratio against past performances provides a benchmark for assessing efficiency and cost management within the context of the company's historical trends.

By analyzing past performances, one can identify whether the current expense ratio is consistent, improving, or deteriorating compared to previous periods. This comparison can highlight areas where the company may need to improve its cost structures or operational efficiencies. In contrast, evaluating against production costs, cash flow statements, or revenue amounts does not directly assess how well a company is managing its expenses in relation to others in the industry, making past performances the most relevant metric for this purpose.