Ratios are used to evaluate the performance of your business and identify potential problems. Each ratio informs you about factors such as the earning power, solvency, efficiency, and debt load of your business. They are used to measure the relationship between two or more components of the financial statements and have greater meaning when the results are compared to industry standards for businesses of similar size and activity. Leverage ratios, liquidity ratios, operations ratios, and profitability ratios. Posted February 2004.