WHAT IS A ‘RATIO’?

abhishreshthaa

Abhijeet S
A Ratio Is one figure expressed in terms of another figure. It is a mathëàfica1 yardstick that measures the relationship between two figures, which are related to each other and mutually Inter-dependent.


Ratio is expressed by dividing one figure by the other related figure.


Thus a ratio is an expression relating one number to another. It is simply the quotient of two numbers. It can be expressed as a fraction or as a decimal or as a pure ratio or in absolute figures as so many times.



An accounting ratio is an expression relating two figures or two accounts or two sets of account heads or groups contained in the financial statements.
 
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