What does chain ratio mean?

A chain ratio in finance refers to a comparison of two related financial measures, typically expressed as a ratio. The term "chain" implies a sequential relationship between the two measures, often comparing a current measure to a previous measure or a forecasted measure to an actual measure. For example, a chain ratio could compare a company's current year revenue to its previous year revenue, or it could compare a company's forecasted earnings to its actual earnings. This type of comparison can provide insight into the company's financial performance, growth, and trends over time. Chain ratios are commonly used in financial analysis to assess the relative changes in financial metrics and to identify patterns or trends. They can be particularly useful for evaluating the performance of a company or investment over time, and for making informed decisions about future financial strategies. In summary, a chain ratio in finance is a comparison of two related financial measures that provides valuable insight into the performance and trends of a company or investment. It is a useful tool for financial analysis and decision-making.