The ratios that measure the speed with which various accounts are converted into sales or cash and that are used to measure the efficiency of asset usage are known as ______.
A) liquidity ratios
B) activity ratios
C) leverage ratios
D) profitability ratios

Question

Quizplus · Accepted Answer

Activity ratios, also known as turnover ratios or efficiency ratios, measure how efficiently a company uses its assets to generate sales or cash. These ratios are crucial for analyzing the operational efficiency of a business.

The Ratios That Measure the Speed with Which Various Accounts