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What is a financial ratio?
A financial ratio is a number that convey the value of one financial variable relative to another. Put more easily, a financial ratio is the final outcome you get when you divide one financial number by another. Computing an individual ratio is simple, but each ratio ought to be analyzed carefully to effectively measure a firm's performance.
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CAPITALISATION RATE=0.01 EARNINGS PER SHARE(E)=10 ASSUME RATE OF RETURNS ON INVESTMENTS (R):15
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