There are many ways of supporting cross border related party transactions from an arm’s length perspective, but sometimes there are options that we may just not think about at the time. This blog post will focus on two specific ratios which you may not have considered but could make your analysis (or life) much easier.
A ratio is a statistical indicator that provides a measure of the relationship between two figures. This relationship can be expressed as either a percentage or as a quotient. In transfer pricing we use ratios to interpret the financial data of our tested party to that of identified comparables.
Typical ratios used in a financial analysis include: Continue reading “A new transfer pricing perspective – ratio analysis techniques”