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accounting ratio

A Dictionary of Business and Management | 2006 | 429 words | Copyright

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. return on capital employed), in days (e.g. debtor collection period), or as a multiple (e.g. rate of turnover). See financial-statement analysis; ratio analysis.

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