Which of the following best describes an efficiency ratio?
A)A measure of how well a company converts revenue into earnings
B)A measure of how quickly a company processes accounts receivables
C)A measure of a firm's return on assets (ROA)
D)A measure of the efficiency of a company's logistics

Question

Quizplus · Accepted Answer

An efficiency ratio measures how effectively a company uses its assets to generate profits. It is a measure of how well a company converts revenue into earnings. An example of an efficiency ratio is the asset turnover ratio.

Which of the Following Best Describes an Efficiency Ratio