Financial ratios are useful metrics for relating two items in the financial statements. Interpreting changes in a

Question:

are useful metrics for relating two items in the financial statements. Interpreting changes in a particular financial ratio is difficult, however, because the explanation might relate to changes in the numerator, the denominator, or both” Explain this statement using a change in the cost of goods sold to sales percentage from 65% to 68%.

Financial Ratios
The term is enough to curl one's hair, conjuring up those complex problems we encountered in high school math that left many of us babbling and frustrated. But when it comes to investing, that need not be the case. In fact, there are ratios that,...