The_________ ratios measure how efficiently a firm is using its assets.
A) leverage
B) activity
C) conformance
D) liquidity

Question

Quizplus · Accepted Answer

The activity ratios, also known as asset utilization ratios, measure how efficiently a firm is using its assets to generate revenue. They include ratios such as inventory turnover, accounts receivable turnover, and total asset turnover. The other options, leverage ratios, conformance ratios, and liquidity ratios, focus on the firm's debt levels, adherence to regulations, and ability to meet short-term obligations, respectively.

The_________ Ratios Measure How Efficiently a Firm Is Using Its