Ratio analysis
Ratio analysis is an examination of the relationship between two numbers or sets of numbers on financial reports. Analyses of ratios, especially over time, can give a fairly clear picture of how well a company conducts its business.
Definitions
According to College Accounting: A Practical Approach by Slater (13th edition),
- Ratio analysis. An examination of the relationship between two numbers or sets of numbers on financial reports. Analyses of ratios, especially over time, can give a fairly clear picture of how well a company conducts its business.
According to Managerial Accounting by Braun, Tietz (5th edition),
- Ratio analysis. Evaluating the relationships between two or more key components of the financial statements.
Related concepts
- Accounting (alternatively known as accountancy) is management of financial data, information, and knowledge about financial transactions of legal entities. Accountancy tends to include bookkeeping and, depending on a particilar enterprise, may also include quatitative analysis of financial data in the bookkeeping system and/or business intelligence.
