Which statement best describes a financial ratio and financial ratio analysis? A financial ratio simply represents a relationship between 2 or more pieces of financial information; there is one absolute, standard list of ratios that applies to all financial analysis A financial ratio simply represents a relationship between 2 or more pieces of financial information; there is NOT one absolute, standard list of ratios that applies to all financial analysis A financial ratio simply represents a market estimate of a certain aspect of a firm's financial position and the industry's benchmark; there is one absolute, standard list of ratios that applies to all financial analysis A financial ratio simply represents a market estimate of a certain aspect of a firm's financial position and the industry's benchmark; there is NOT one absolute, standard list of ratios that applies to all financial analysis
Financial Ratios
A Ratio refers to a figure calculated as a reference to the relationship of two or more numbers and can be expressed as a fraction, proportion, percentage, or the number of times. When the number is determined by taking two accounting numbers derived from the financial statements, it is termed as the accounting ratio.
Return on Equity
The Return on Equity (RoE) is a measure of the profitability of a business concerning the funds by its stockholders/shareholders. ROE is a metric used generally to determine how well the company utilizes its funds provided by the equity shareholders.
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Which statement best describes a financial ratio and financial ratio analysis?
A financial ratio simply represents a relationship between 2 or more pieces of financial information; there is one absolute, standard list of ratios that applies to all financial analysis
A financial ratio simply represents a relationship between 2 or more pieces of financial information; there is NOT one absolute, standard list of ratios that applies to all financial analysis
A financial ratio simply represents a market estimate of a certain aspect of a firm's financial position and the industry's benchmark; there is one absolute, standard list of ratios that applies to all financial analysis
A financial ratio simply represents a market estimate of a certain aspect of a firm's financial position and the industry's benchmark; there is NOT one absolute, standard list of ratios that applies to all financial analysis
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