I was asked just recently if there’s a point in presenting a financial ratio if it’s so much out of what’s normally expected, i.e. ROA is say o.002% representing this the return on assets close to zero, or an accounts receivable turnover ratio is say 1 since all the company’s sales are still as outstanding receivables and nothing has been collected. 

The matter of fact that those ratios are outside what one would normally expect isn’t in itself a reason to not disclose them within your financial reporting should financial ratios be required to disclose. In itself it also isn’t a reason to monitor such ratios should we have a focus on ensuring they improve one day. It may be that we’ve defined ourselves a goal to change the ROA from 0.002% to 1% within 5 years and as such I believe it’s important to monitor such a ratio.

However, something to take from this discussion I had, was the consideration of which ratios are indeed important and relevant for an entity or an industry and thus I encourage you to find out what should yours be. It is important to have some ratios defined for your business purely from a strategic perspective – your activities, visions and goals are more profound and structured once you have ratios.
Define the ratios, determine the current situation, goals and start working towards them.