A firm's efficiency in utilizing resources at its disposal in generating sales would be measured by profitability ratios.

Question

Quizplus · Accepted Answer

Efficiency in utilizing resources to generate sales is typically measured by activity ratios (such as inventory turnover, accounts receivable turnover, etc.), not profitability ratios. Profitability ratios measure a company's ability to generate profit from its operations.

A Firm's Efficiency in Utilizing Resources at Its Disposal in Generating