Investopedia / NoNo Flores An accounting ratio is a metric that compares one line item from a company's financial statements to another. Accounting ratios, an important subset of financial ratios ...

Ratios: Show the relationship between two quantities, like the teacher to student ratio in a class. Purpose in business: Ratios help analyse a company's performance, liquidity, and overall health ...

When determining a company's solvency 一 the ability to pay its short-term obligations using its current assets 一 you can use several accounting ratios. The current ratio is one of them.

But, regardless of which set of standards is followed, there are three main areas where financial accounting helps with decision-making: Fundamental analysis depends heavily on the accounting data ...