Math & Statistics

What Is a Ratio?

A ratio compares two or more quantities, showing how many times one contains the other. It can be written as 3:2, 3 to 2, or 3/2. Ratios are simplified by dividing all terms by their greatest common factor: 12:18 simplifies to 2:3.

Ratios in Finance

Many financial measures are ratios, such as the debt-to-income ratio, loan-to-value ratio, and price-to-earnings ratio.

Ratio vs. Fraction

A fraction compares a part to a whole; a ratio can compare any two quantities, including part to part.

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Last updated: September 27, 2026. This definition is for general educational purposes only. It is not financial, investment, tax, legal, or medical advice, and it does not recommend any product or course of action. For decisions about your own situation, consult a qualified professional.