Explain the Ratio analysis according to kosher
A ratio is the relation of the amount a to another b expressed as the ratio of a to b; a: b (a is to b) or a as simple fraction integer decimal fraction or percentage.
Is a simple language ratio is one number expressed in item of another and can be worked out by dividing one number into the other.
This quantitative relationship (i.e. ratio may be expressed in either of the following ways:
In proportion: in this form the amount of the two item are being expressed in a common denominator. The example of this form of expression is the relation ship between current assets and current liabilities as 2:1.
In rate or time or coefficient: in this form a quotient obtained by dividing one item by another item is taken as unit of expression. The example of this form is sale divided by stock (say it comes 60; thus 6 time is the ratio between sales and stock. It is important to note that when ratio is expressed in this form it is called as turnover and is written in times.
In percentage: in this form a quotient obtained by dividing one item by another is multiplied by one hundred and it becomes the percentage form of expression. For example. For example the relation ship between gross profit and sales may be expressed as 25%