Theoretical Review of the Role of Financial Ratios

ArXiv ID: ssrn-3472673 “View on arXiv”

Authors: Unknown

Abstract

Purpose – Financial ratios are an instrumental tool in the world of finance and hence comprehensive knowledge of its various aspects is mandated for its user. T

Keywords: Financial Ratios, Fundamental Analysis, Credit Risk, Financial Statement Analysis, Solvency, Fixed Income

Complexity vs Empirical Score

• Math Complexity: 2.0/10
• Empirical Rigor: 1.0/10
• Quadrant: Philosophers
• Why: The paper is a qualitative literature review that discusses historical concepts and applications of financial ratios without presenting novel mathematical derivations, statistical models, or backtesting results.

  flowchart TD
    A["Research Goal:<br>Review Financial Ratios' Theoretical Role"] --> B["Key Methodology:<br>Theoretical Review & Analysis"]
    B --> C["Data/Inputs:<br>Finance Literature & Financial Statements"]
    C --> D["Computational Processes:<br>Ratio Calculation & Fundamental Analysis"]
    D --> E["Key Outcomes:<br>Credit Risk, Solvency & Fixed Income Assessment"]