Which is a liquidity activity ratio?
A) profit margin
B) inventory turnover
C) return on assets
D) times interest earned

Question

Quizplus · Accepted Answer

Inventory turnover is a liquidity activity ratio as it measures the number of times inventory is sold and replaced within a specific period, which assesses a company's ability to turn its inventory into cash quickly. Profit margin, return on assets, and times interest earned are profitability and solvency ratios.

Which Is a Liquidity Activity Ratio