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what is the meaning of ratio? Types of ratios?
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Answer Posted / h.r. sreepada bhagi
Ratio is the Mathmetical(Arithmetical) expression of
relationship between two numbers of the same kind. Ratio can
be used in different fields. From Accounting angle ratios
are very significant tools in measuring various performance
parameters and other key accounting figures. Various ratios
ratios are used to compare similar figures for different
fiscal periods for the same company, with the industry, with
other companies in the same/related field or industry in
general.
Different ratios are expressed differently like A:B, %, No.
of times, etc.
For example in Financial Ratios such as Current Ratio,
Debt-Equity Ratio, Capital Gearing Ratio, P/E Ratio, P/B
Ratio, Stock Turn over Ratio, Gross Profit Ratio & many more
are very relevant & significant in measuring the performance
& position of a company's strength & future prospects.
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