A Financial Ratio by Itself Is of Little Value

question 99

Essay

A financial ratio by itself is of little value.To what can you compare your financial ratios to make them valuable financial planning tools?

---

Definitions:

Capital Assets

Long-term assets acquired or owned by a company or individual, anticipated to be used for more than one year, and intended for the operation or investment purposes.

Government-Owned Landfill

A waste disposal facility owned and operated by a governmental entity for the management of trash and recyclables.

Accrued

Expenses or revenues that have been incurred but not yet recorded in the company's accounts during the accounting period.

Pro-Rated Basis

The allocation of amounts or costs in proportion to some factor, such as time or usage.