What Is an Accounting Ratio?
Accounting ratios, an important subset of financial ratios, are a group of metrics used to measure the management aptitude, efficiency, and profitability of a company based on its financial reports.
They provide a way of expressing the relationship between one accounting data point to another and are the basis of ratio analysis. They also serve as a comparison toolbox to compare the firms' performance to that of its peer in the same industry.
