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financial ratios (1 Viewer)

zepplu

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anyone know if you get marked down for rounding up to a whole number?
or should you round to 2 decimal places just to be safe? (except for the profitability ratios)
 

jimmysmith560

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Generally speaking, there should be no issue with rounding up to a whole number, although I would question the reason to do so, especially when rounding to 2 decimal places would provide a more accurate figure, since it would be closer to the original number that you calculated. For example, consider a random number: 2.64987. As a ratio, rounding this number to 2 decimal places would result in a ratio of 2.65:1. On the other hand, rounding to a whole number would result in a ratio of 3:1. Notice that 2.65:1 is more accurate than 3:1, since rounding to 2 decimal places adds a much lower value to the original number than rounding to a whole number.

As such, unless otherwise stated, I would recommend rounding ratio figures to 2 decimal places.

I hope this helps! 😄
 

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