Definition
Result of one number or quantity divided by another. Ratios are the simplest mathematical (statistical) tools that reveal significant relationships hidden in mass of data, and allow meaningful comparisons. Some ratios are expressed as fractions or decimals, and some as percentages. Major types of business ratios include (1) Efficiency, (2) Liquidity, (3) Profitability, and (4) Solvency ratios.
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