Required information Learning Objective 13-P3: Define and apply ratio analysis. Skip to question Ratio analysis provides clues to and symptoms of underlying conditions. Ratios, properly interpreted, identify areas requiring further investigation. A ratio expresses a relation between two quantities such as a percent, rate, or proportion. Ratios can be organized into the building blocks of analysis: (1) liquidity and efficiency, (2) solvency, (3) profitability, and (4) market prospects. Solvency Ratio Examples Knowledge Check 01 A company has total assets of $150,000; total liabilities of $50,000 and total equity of $100,000. What is this company's debt-to-equity ratio