A firm's efficient use of its assets in running the business is key to maintaining sufficient cash flow. Ratios that accountants utilize to measure the efficient use of assets are called ________ ratios.
A) leverage
B) liquidity
C) activity
D) profitability

Question

Quizplus · Accepted Answer

Activity ratios such as the inventory turnover ratio measure a firm's efficient use of assets. The goal is to maintain a relatively high turnover ratio.

A Firm's Efficient Use of Its Assets in Running the Business