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Summarize a large amount of accounting and financial information in order to compare the performance of companies
In general, it can attribute any number in the financial statements to another number to reach a meaningful indication, usually expressed as a percentage or a number of times
Financial ratios are characterized by being able analyst to overcome the so-called problem of scale in financial and accounting literature. The problem arises when comparing the size of accounting figures
and financial indicators for companies between which there is great variation in size market value
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