Q:

What is the industry standard for financial ratios?

A:

Quick Answer

Industry standards for financial ratios include price/earnings, liquidity, asset management, debt and profitability or market ratios. Financial ratios are used to compare one company to another company or to an entire industry in order to measure performance, notes Cornell University Management Library.

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What is the industry standard for financial ratios?
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Full Answer

These ratios are taken from the financial data, such as balance sheets or cash flow statements from a specific company or compiled for industries as a whole, according to Ohio University Libraries. Ratios can be expressed in percentages or in decimal values. Ratios and analysis of industries can be found in business reference materials, such as Standard & Poor’s, that are available online and at most public or university libraries, notes Ohio University Libraries.

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