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Accounting Ratios

The quantitative relationship between any two selected items of financial or business data, e.g. marketing costs to sales or sales per square foot of selling space. Ratios provide guides to operating effectiveness and are useful in supplementing normal management accounting information, e.g. research and development cost to saleS; ooperating profit to sales; production cost to total costs; current assets to total net assets. See also MANAGEMENT RATIOS.

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