Ratios are financial measures that are used to evaluate a company's performance.
To do a ratio analysis, one must use certain financial data from the company's annual report/10K and compute specific ratios or percentages. Ratios can be used to evaluate the company, compare it to other companies or measure it's performance against it's industry norms.
Generally financial ratios can be classified into the following catagories (some examples are given)
Return on Investment
Total Asset Turnover
Along with books on ratio analysis, books on financial statement analysis will disucss how to use and interpret ratios. To find books use the online Classic Catalog. Type in the appropriate subject term and click the SUBJECT tab. Acceptable Subject terms are:
Corporations -- Finance