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Ratio Measurements
The ratio scale has, in addition to the properties of the nominal, ordinal, and interval scales, an absolute zero.
| Absolute zero | Represents a point below which no value can be assigned. |
|---|
Zero represents no less than one of the properties being gauged by the scale.In salary administration, for example, dollars in value can be shown on the interval scale, while percentages can be shown on a ratio scale.Compensation dollars, however, can only be on a ratio scale so long as no negative number exists.(Remember that division by zero is not an acceptable mathematical operation.Hence, ratio measurements have certain computational limitations.)
Examples of ratio measurements include:
| SALES ($0 Base) |
EXPENSES ($0 Base) |
EXPENSE RATIO (0.0 Base) |
|---|---|---|
| $1,000,000 | Rent - $5,000 | 0.5% |
| Travel - $50,000 | 5.0% | |
| Salaries - $500,000 | 50.0% | |
| Benefits - $175,000 | 17.5% |
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