- Accounting Ratio
A way of expressing the relationship between one accounting result and another, which is intended to provide a useful comparison. Accounting ratios assist in measuring the efficiency and profitability of a company based on its financial reports. Accounting ratios form the basis of fundamental analysis.

Also called financial ratio.

An accounting ratio compares two aspects of a financial statement, such as the relationship (or ratio) of current assets to current liabilities. The ratios can be used to evaluate the financial condition of a company, including the company's strengths and weaknesses. An example of an accounting ratio is the price-to-earnings (P/E) ratio of a stock. This measures the price paid per share in relation to the profit earned by the company per share in a given year.

*Investment dictionary.
Academic.
2012.*

### Look at other dictionaries:

**accounting ratio**— ➔ ratio * * * accounting ratio UK US noun [C] ACCOUNTING ► FINANCIAL RATIO(Cf. ↑financial ratio) … Financial and business terms**accounting ratio**— financial ratio A ratio calculated from two or more figures taken from the financial statements of a company in order to provide an indication of the financial performance and position of that company. Ratios may be expressed as a percentage (e.g … Accounting dictionary**accounting ratio**— financial ratio A ratio calculated from two or more figures taken from the financial statements of a company in order to provide an indication of the financial performance and position of that company. Ratios may be expressed as a percentage (e.… … Big dictionary of business and management**ratio**— the proportional relationship of one thing to another * * * ratio ra‧ti‧o [ˈreɪʆiəʊ ǁ ˈreɪʆoʊ] noun [countable] a relationship between two amounts that is represented by a pair of numbers showing how much greater one amount is than the other: •… … Financial and business terms**accounting rate of return**— ARR An accounting ratio that expresses the profit of an organization before interest and taxation, usually for a year, as a percentage of the capital employed at the end of the period. Variants of the measure include using profit after interest… … Accounting dictionary**accounting rate of return**— ARR An accounting ratio that expresses the profit of an organization before interest and taxation, usually for a year, as a percentage of the capital employed at the end of the period. Variants of the measure include using profit after interest… … Big dictionary of business and management**Accounting liquidity**— (liquidity) is a measure of the ability of a debtor to pay their debts as and when they fall due. It is usually expressed as a ratio or a percentage of current liabilities.Calculating liquidityFor a corporation with a published balance sheet… … Wikipedia**accounting**— /euh kown ting/, n. 1. the theory and system of setting up, maintaining, and auditing the books of a firm; art of analyzing the financial position and operating results of a business house from a study of its sales, purchases, overhead, etc.… … Universalium**ratio analysis**— A way of expressing relationships between a firm s accounting numbers and their trends over time that analysts use to establish values and evaluate risks. Bloomberg Financial Dictionary * * * ratio analysis ratio analysis ➔ analysis * * *… … Financial and business terms**ratio analysis**— The use of accounting ratios to evaluate a company s operating performance and financial stability. Such ratios as return on capital employed and gross profit percentage can be used to assess profitability. The liquidity ratio can be used to… … Accounting dictionary