numbers whispering whether a company is thriving, lying, or slowly drowning.
means a financial ratio is one line of a company's accounts divided by another, turning raw numbers into a signal you can compare across time or rivals.
from double-entry bookkeeping gave the world clean numbers by the 1400s, but ratio analysis as a discipline emerged with early 20th-century credit analysts like the ones behind dun and bradstreet, who needed a fast way to judge whether a stranger's business deserved a loan.
enron's current ratio — looked healthy in 2000 while fraud hid underneath
apple's gross margin — holds near 40 percent, envy of every hardware maker
amazon's low margins — thin net margin masked massive cash flow for years
lehman's leverage ratio — hit 30 to 1 right before the 2008 collapse