Ratios that measure how effectively an entity is using is assets are called
A) liquidity ratios.
B) activity ratios.
C) solvency ratios.
D) profitability ratios.

Question

Quizplus · Accepted Answer

Activity ratios measure how effectively an entity is using its assets to generate revenue. Liquidity ratios measure an entity's ability to meet short-term obligations, solvency ratios measure an entity's ability to meet long-term obligations, and profitability ratios measure an entity's ability to generate profits from its operations.

Ratios That Measure How Effectively an Entity Is Using Is