Ratios Description

Each ratio or calculation in this book is presented on its dedicated page in the following standard format:

  • Type of ratio (performance ratio, liquidity ratio, and so on)
  • Formula for calculating the ratio
  • Description of the ratio
  • Example based on ABC Company or XYZ Company
  • Synonyms (e.g., quick ratio is a synonym for acid test)

Image Note  For completeness and easy reference, each ratio synonym has its own dedicated page.

Most ratio calculations are based on data from the hypothetical ABC Company, whose financial data are listed in that company’s income statement, balance sheet, cash flow statement, and additional company ...

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