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Radio Analysis

Radio Analysis

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Published by abhayjain686

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Published by: abhayjain686 on Jan 28, 2010
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10/19/2012

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RATIO ANALYSIS
 
 
MEANING
 The term
‘ratio’
refers to the numerical orquantitative relationship between twoitems/ variables.
 Thus a
‘ratio’
is a simple arithmeticalexpression of the relationship of onenumber to another and is obtained bydividing the former by the later.
When this ratio is expressed withreference to the items shown in financialstatement, then it is called
‘accountingratio’.
 
 
 The ratio is calculated by dividingone item of the relationship by theother. The dividing number is knownas the base or base number. Theother number is expressed in relationto this base number. In ratio analysisbase is always taken as 1 or 100 &the other number is expressed in itscomparison.

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