What is the 'Accounting Ratio'
A way of expressing the relationship between one accounting result and another, which is intended to provide a useful comparison. Accounting ratios assist in measuring the efficiency and profitability of a company based on its financial reports. Accounting ratios form the basis of fundamental analysis.
Also called financial ratio.
BREAKING DOWN 'Accounting Ratio'
An accounting ratio compares two aspects of a financial statement, such as the relationship (or ratio) of current assets to current liabilities. The ratios can be used to evaluate the financial condition of a company, including the company's strengths and weaknesses. An example of an accounting ratio is the pricetoearnings (P/E) ratio of a stock. This measures the price paid per share in relation to the profit earned by the company per share in a given year.

Current Ratio
The current ratio is a liquidity ratio measuring a company's ... 
Ratio Analysis
A ratio analysis is a quantitative analysis of information contained ... 
Key Ratio
A mathematical ratio that illustrates and summarizes the current ... 
Combined Ratio
A measure of profitability used by an insurance company to indicate ... 
Activity Ratios
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Efficiency Ratio
Ratios that are typically used to analyze how well a company ...

Trading
Ratio Analysis
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Analyze Investments Quickly With Ratios
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Efficiency Ratio
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Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Investing
Financial Ratios to Spot Companies Headed for Bankruptcy
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Do Your Investments Have ShortTerm Health?
If a company is strong enough to survive tough times, it is more likely to provide longterm value. 
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WalMart's 5 Key Financial Ratios (WMT)
Identify the five key financial ratios that fundamental analysts use to evaluate WalMart's financial position and determine if its stock is a good buy. 
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4 Simple Investing Ratios You Need To Know
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5 Basic Financial Ratios And What They Reveal
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Key Financial Ratios to Analyze Tech Companies
Understand the technology industry and the companies that operate in it. Learn about the key financial ratios used to analyze tech companies.

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What is the difference between efficiency ratios and profitability ratios?
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How do I use ratios to perform a financial analysis?
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How can a company quickly increase its liquidity ratio?
Discover what high and low values in the liquidity ratio mean and what steps companies can take to improve liquidity ratios ... Read Answer >> 
Why do shareholders need financial statements?
Discover the importance of a company's financial statements for stock shareholders in evaluating their equity investment ... Read Answer >>