Topics: Scientific method, Financial ratio, Ratio Pages: 8 (2630 words) Published: March 6, 2013
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Introduction: Man, always seek the existing order and understanding about the phenomena governed by laws governing their relationships and was able to explain phenomena and to predict their behavior. This kind of attitude toward access to integrated data collection was done to make better decisions Considering to the high volume of raw data to create and develop the growing market need for investment in human societies use financial info always been led to intellectual challenges to provide useful information and good decision makers were and definitions and specific criteria for this data set. One of these cases, trying to balance between the discovery of financial information has been using financial ratios decisions nineteenth century was formed, though before that "fit theory" was developed in the human sciences. From this date onwards, the financial ratios in areas of applied research has been used. Practical studies of financial ratios to predict future success in the field of research and decisions and making model has been used. Process these efforts, indicate that no matter how the relationship between objectives and financial information specified information in meaningful categories based on function or nature, they have created this information in the form of the relationship between ratios also has more strength. The first financial ratio of the financial analysis was used, was more than the current information needs Those awarded credit supplies, then came to be able to view the relations between financial data expressed in the form of a system. This idea led to the emergence of triangular system that Thompson was still valid and desirability is necessary. This activity challenges from different angles of a commercial institution, such as: investment decisions, operational and financing to continue and lead to the formation of financial ratios are different schools. Experience using financial analysis, financial ratios reflect the different applications in a variety of decisions, but in theory, principles, they have not been examined. 1920 to 1929 During the 1920's, interest in increasing financial ratios and many articles published. Most studies of this period directly related to accept or reject the approach was to Wall wall. Commercial institutions, universities, credit institutions and analysts attempt to collect data to determine each industry began. This process of data collection and calculation to determine the industry average industry called "scientific analysis of proportions" was called. Although defined features "scientific" seems, is no Msmy because any hypothesis test based on this relationship it was not. Most of this decade, more research work at Walwall emphasize the use of various financial ratios were analyzed. Other analysts also were trying to kind of complexity to the analysis of proportions in the 1920's to give. Bliss Blys first coherent system of ratios provided that the reasonable and in line with previous methods of maintaining continuity was important topic. He ratio constitutes "fundamental indicators of status relations within a company" consider the contract and it also believes that the standard relationships between companies can be competitive in terms of comparison set. With these assumptions, the model provided an economic unit that was to contain total ratios. In this model evaluation cost ratios, cost, sales and financial relations with the relevant ratios to assess profitabil-

ity made. Bliss Blys model and assumptions it was simple but his study for the development of the theory of proportions analysis was very promising. 1920, Volume passion to use ratio analysis as well as the arrival of the first period there was criticism. In 1925, Gilman Gilman following criticisms raised about the proportions: Changes in proportions over time due to changes in the different nature of its constituent items, is not to be...
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