In mathematics, a ratio is a comparison of two or more numbers that indicates their sizes to each other. A ratio compares two quantities by division, with the dividend or number being divided termed the antecedent and the divisor or number that is dividing termed the consequent. In mathematics, a ratio indicates how many times one number contains another.
The following points highlight the top six advantages of ratio analysis. The benefits are 1. Useful in Financial Position Analysis 2. Useful in Simplifying Accounting Figures 3. Useful in Assessing Operational Efficiency 4. Useful in Forecasting Purposes 5. Useful in Locating the Weak Spots of the Business 6. Useful in Comparison of Performance.