When the concept of ratio is defined with respect to the item shown in the financial statements, it is termed as _________

Question

RRB Paper · Accepted Answer

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accounting ratio

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When the concept of ratio is defined with respect to the item shown in the financial statements, it is termed as a financial ratio.
Ratio analysis is an examination of financial statements conducted by preparing and evaluating a series of ratios.
Ratios (or financial ratios), like other financial analysis data, normally provide meaningful information only when compared with ratios from previous periods for the same firm (i.e., time series, or trend, analysis) or similar firms (i.e., cross-sectional analysis).