Академический Документы
Профессиональный Документы
Культура Документы
Overview Mathematical relationship between 2 quantities. Ratio for 600 to 300 is 2:1, 2 to 1, or 2. Use to compare companys performance with industry norms. Show relationship between 2 financial terms from Balance Sheet, Income Statement, Example for a Solvency Ratio Ratios can be categorized such as ratios for Solvency, Profitability, Efficiency, Example for Currency Ratio which is a Solvency ratio: o Current Ratio = current assets/current liabilities o Predicts short term cash problems. Use to Evaluate Companys Financial Situation Students can compare a companys ratios to industry ratios (norms) for companys primary SIC/NAICS. Look Up Industry Ratios Using Industry SIC or NAICS: D&B Financial Ratios: Industry Norms & Key Business Ratios (Arranged by SICs) Ref Reserve HF5681 R25 I52x (3 most current years) Circulation Desk, Folsom Library; Earlier editions on the 3rd floor, Folsom Library.
Quartiles Arrange ratios in numeric order from weakest to strongest. Divide ratios into 4 roughly, equally sized groups. Upper Quartile (group with strongest ratios) Lower Quartile (group with weakest ratios) Largest ratio value not always the strongest; Depends on ratio. Range between upper and lower quartiles represents middle 50 % of all companies in sample.
Median Industry ratio thats smack dab in the middle of the ratio line up. If you had odd number of ratios such as 19, median is the 10th ratio in line up. If you have even number of ratios such as 20, median is average of 10 and 11th ratios. Why Use Quartiles and Medians? Handles outliers. Accounts for range of ratios in group. More accurate than average for group of ratios.
For more on financial ratios, go to: http://library.rpi.edu/update.do? artcenterkey=458. C.O Holmes 10/4/2009