Ratio Analysis

examination of calculated indices based on accountants' reports

A ratio is a quantity that denotes the proportional amount or magnitude of one quantity relative to another.Ratios are unitless when they relate quantities of the same dimension. When the two quantities being compared are of different types, the units are the first quantity "per" unit of the second — for example, a speed or  velocity can be expressed in "miles per hour". If the second unit is a measure of time, we call this type of ratio a rate.
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A tool used by analysts which utilizes the relationship between accounting figures and their trends over time to establish values and evaluate risks.