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Finance Formulas / July 17, 2018 / Cecelia Weiss

Accounting ratios, also known as financial ratios, are used to measure the efficiency and profitability of a company based on its financial reports. They provide a way of expressing the relationship between one accounting data point to another, and are the basis of ratio analysis.

A depreciation rate is the percentage of a long-term investment that you use as an annual tax deductible expense during the period over which you claim it as a tax deduction. Because you use fixed assets, or major business investments, over time, it doesn't make sense to simply deduct the total amount you pay during the year you pay it.

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