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Financial Ratio

   Also found in: Wikipedia 0.01 sec.
Financial ratio
The result of dividing one financial statement item by another. Ratios help analysts interpret financial statements by focusing on specific relationships.

Financial Ratio
The division of one piece of financial information by another. Financial ratios are very common in fundamental analysis, which investigates the financial health of companies. An example of a financial ratio is the price-earnings ratio, which divides a publicly-traded company's share price by its earnings per share. This helps analysts determine whether a company's share price properly reflects its performance.

financial ratio
See ratio.


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This transaction provided RYMCO with an alternative source of funding and it will allow it to enhance its financial ratios, specifically its debt to equity ratio," BSEC said.
By analyzing financial ratios that are generated by numbers on a balance sheet, a business owner is able to tell how well the company collects their accounts receivables, how fast the inventory is moving out and replenished, as well as how much exposure the company has towards debt.
Once the modeling process has been developed, the financial projections can be evaluated by calculating standard financial ratios and comparing the results to industry targets (table).
 
 
 
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