Abstract In this article, the author focuses on the use of accounting data by accountants, particularly on the use of financial ratio analysis, followed from its early origins to the present time. Only the broad outline of this development is presented and the discussions is centered upon general analytical approaches or individuals. According to the author the first causes of financial statement analysis can be traced back to the last stages of America's drive to industrial maturity in the last half of the nineteenth century. As the management of enterprises in the various industrial sectors transferred from the enterprising capitalists to the professional manager and as the financial sector became a more predominate force in the economy, the need for financial statements increased accordingly. Although there was much overlap, the development paths of ratio analysis for creditor purposes and for managerial purposes were different. After the turn of the century, some important developments in ratio analysis occurred during the period prior to and during World War I.
James O. Horrigan (Mon,) studied this question.