I’m reading a report right now which deals with some ratios, and when the ratios are below 1:1, it refers to them as negative, with ratios above 1:1 being referred to as positive. (For example, a ratio of .96 is referred to as negative, and a ratio of 1.02 is referred to as positive.)
I understand the intended meaning of this, and the rationale for using these terms, but my question is, is this an established usage?
That’s a really bad convention. What do they do for ratios that are actually negative numbers, like -3:2?
If a “negative” ratio pertains to a trend line, it would indicate a diminishing progression, hence, negative increase.
It is common usage when its a Ratio of X to X. ! (eg money in the bank..)
When its a slope, its height to width.. thats NOT X to X ,and so its not common usage for that.
When a ratio is expressed as a logarithm (for example when measuring power in dB), a negative number means a ratio smaller than 1:1
Context is everything. What is the subject of the report and what are the ratios measuring?
Meh, I was just asking if it’s ever in line with any convention. I don’t really know much about the details here–this is just something I saw in passing while working on something tangentially related.
These are financial ratios (I don’t actually know exactly what that means, but I think it represents growth. But I don’t know.)
I know of no example where a ratio <1 is called negative. An engineer, scientist, or mathematician would not use that convention but finance people and accountants just have a different way of thinking.
A P/E ratio can be negative if the company is losing money, but that does not mean the ratio is <1, it means it’s <0.
There is something in accounting called the current ratio (current assets:current liabilities). You want it to be >1 but it can never be negative.
Never heard of a negative P/E. Earnings are dividends or other disbursements from the issuer, not speculative gains or losses. Do companies actually demand payment as a condition of being a shareholder when they are losing money?
The earnings in a P/E ratio has nothing to do with dividends or other distributions; it is net earnings (earnings before such distributions). It is not speculative, it is plainly stated on financial statements (P&L). When P/E is negative, it is generally not reported but still exists theoretically.
As an engineer, if pressed to express that in words instead of numbers, I’d probably go with “less than unity”. Negative makes no sense.
Are we talking about medical titers here?
Because for many specific medical assays, titers of < 1:1 are considered negative in that they indicate lack of reaction to the antigen or other substance being tested. Hence negative in this case means a test whose result shows a lack of reaction, not a negative number.
Also in medical nomenclature, a titer of 1:2 is greater than a titer of 1:1. This is due to the fact that a titer measures dilution. 1:128 is a greater dilution than 1:64, etc.
Just throwing in my two cents…
Here’s why when I saw the usage I didn’t think it was complete nonsense. Fractions less than one are less than the identity element for multiplication, just as numbers less than zero are less than the identity element for addition. Not that I thought the writer was consciously thinking this and would have explained it in those terms, but it seemed likely to me that he thought of one as a kind of “pivotal” element for ratios in much the same way that zero is a “pivotal” element for sums.
You get negative ratios in that sense in the stock market.
I’m talking about the market here, not the stock valuation.
When you’re in negative territory the stock has gone down. This is a “negative ratio” to its previous value. Ratios are sometimes used, particularly in stock speculation, when you are interested in comparing the behviour of two different stocks, or of a particular stock compared to an index, and a comparison of absolute price would not be meaningful.
Finance people and accountants don’t do that either that I know of, and I work with them a lot. I’ve called that kind of relationship “sub-unity” before.
Those, again, are trendlines.
That’s how it’s used for change. If the change in relative prices/wages/etc is <1 then that’s a negative change. Any change in an index that is <1 is a negative change.
In terms of margin over unity, a ratio of <1:1 can be considered negative. For instance, if the stress on a component loaded in tension exceeds the tensile strength of the material, we would say the component has a negative margin where the margin is calculated as M = strength/stress - 1. This is done to provide a percentage of capability over material strength. Similarly, for margins expressed in logarithmic terms (often used to express power or amplitude factors such as signal gains or vibration and shock environments) an under unity value has a negative logarithm, e.g. log[sub]10/sub < 0 if A[sub]2[/sub]<A[sub]1[/sub]. Of course, it should be expressed in these terms so that it is clear that you are talking about a margin against capability rather than just a ratio or capability versus load..
Stranger