My favorite quote re: ratios is from Morris Chang, the founder of TSMC:
“You Americans measure profitability by a ratio. There’s a problem with that. No banks accept deposits denominated in ratios. The way we measure profitability is in ‘tons of money’. You use the return on assets ratio if cash is scarce. But if there is actually a lot of cash, then that is causing you to economize on something that is abundant.”
The quote is funny but wrong. If you measure everything in ton of cash you don't understand what happens. Ratios are powerful (especially the changes over time) but are clue of something that need to be investigated.
One great example, the cash ratios of Walmart were very similar to the one of broken company. Except that it was their operating model to call for having few cash on hand.
“You Americans measure profitability by a ratio. There’s a problem with that. No banks accept deposits denominated in ratios. The way we measure profitability is in ‘tons of money’. You use the return on assets ratio if cash is scarce. But if there is actually a lot of cash, then that is causing you to economize on something that is abundant.”