Question

Why accounting ratios are calculated????​

Answer 1

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To make the items comparable for use in activity ratios, an average figure is calculated for the balance sheet data using the beginning and ending reported numbers for the period (quarter or year). The activity ratios measure the rate at which the company is turning over its assets or liabilities.

Answer 2

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To make the items comparable for use in activity ratios, an average figure is calculated for the balance sheet data using the beginning and ending reported numbers for the period (quarter or year). The activity ratios measure the rate at which the company is turning over its assets or liabilities.