Ratios are a mathematical comparison of two quantities, for example, the price-earnings ratio used to analyze a stock. Ratios of one firm are often compared across time, with those of a similar company, or with all firms in the industry, i.e. an industry ratio or industry average.
Some major forms of financial ratios are:
For additional information see Financial ratios and statement analysis. (2005). In Blackwell Encyclopedia of Management (2nd ed., pp. 194-198). Malden, MA: Blackwell. Retrieved July 5, 2011, from Gale Virtual Reference Library.