Concept
Ratio analysis is a quantitative method used to gain insight into a company's financial health by comparing various financial metrics. It helps stakeholders make informed decisions by evaluating profitability, liquidity, efficiency, and solvency through standardized calculations.
Relevant Fields:
Concept
A ratio is a mathematical expression that compares two quantities, showing how many times one value contains or is contained within the other. It is a fundamental concept in mathematics used to express relationships between numbers, often represented as fractions, decimals, or percentages.
Concept
Proportional allocation is a method used to distribute resources or responsibilities among different entities based on a predefined ratio or proportion. It ensures that each entity receives a fair share relative to their size, contribution, or need, maintaining balance and equity in distribution processes.
Concept
Proportional change refers to the relative change in a variable, expressed as a ratio or percentage, compared to its original value. It is a fundamental concept in mathematics and economics, used to analyze growth rates, elasticity, and comparative statics.
Concept
Mathematical ratios are a way to compare two quantities by expressing how many times one value contains or is contained within the other. They are fundamental in understanding relationships in mathematics, science, and everyday life, providing a basis for proportions, rates, and scaling.
Concept
Financial Statement Analysis is the process of reviewing and evaluating a company's financial statements to make better economic decisions. It involves assessing the financial health, performance, and future prospects of a company by analyzing its balance sheet, income statement, and cash flow statement.
Substantive Analytical Procedures are a critical component of the audit process, used to evaluate financial information by studying plausible relationships among both financial and non-financial data. They help auditors identify significant fluctuations or relationships that are inconsistent with other relevant information or deviate from predicted amounts, thereby assessing the risk of material misstatement in financial statements.
3