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To Be Truly Useful, Financial Ratios Should Be Tracked Over

question 48

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To be truly useful, financial ratios should be tracked over multiple accounting periods.


Definitions:

Foreclosure Sale

A legal process by which a lender sells or repossesses a property after the owner fails to comply with an agreement in the mortgage contract.

Interest

A fee paid for the use of borrowed money, typically a percentage of the amount borrowed.

Mortgage

A legal agreement by which a bank, credit union, or other financial institution lends money at interest in exchange for taking title of the debtor's property, with the condition that the conveyance of the title becomes void upon the payment of the debt.

Lien

A legal right or interest that a creditor has in the debtor's property, generally lasting until the debt that it secures is satisfied.

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