accounting ratio (financial ratio)

Example 1: A financial analyst reviewing Access Bank’s annual report calculates key accounting ratios like return on equity and loan-to-deposit ratio, giving him a quick, clear picture of the bank’s profitability and financial strength without reading every line of the accounts. Example 2: Before investing in Apple, a Wall Street analyst calculates several accounting ratios including profit margin and return on capital employed, to compare Apple’s financial performance against Microsoft and determine which stock offers better value.