RATIO ANALYSIS Definition

RATIO ANALYSIS involves conversion of financial numbers for a firm into ratios. Ratio analysis allows comparison of one firm to another. Since ratios look at relationships inside the firm, a firm of one size can be directly compared to a second firm (or a collection of firms) which may be larger or smaller or even in a different business. Financial Ratio Analysis is a method of comparison not dependent on the size of either firm. Financial Ratios provide a broader basis for comparison than do raw numbers. In the VentureLine database the comparison is conducted against the industry (SIC Code) in which each particular listing is associated.

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LAPPING is a scheme to cover an embezzlement by using payments made by one customer to reduce the receivables balance of another customer.

WHOLLY OWNED SUBSIDIARY is an entity whose parent owns virtually 100% of its common stock.

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