Financial measures Definition
Financial measures or financial ratios are often used as very simple mechanisms to describe the performance of a business or investment. Because they are easily calculated they can not only be used to compare year on year results but also to compare and set norms for a particular type of business or investment.
However, comparing businesses and investments just by considering a single measure is impossible. Also the nature of an investment or type of company can be very different as can the risk involved for the investment.