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 how efficiently a company is converting its inventory into sales. It helps to determine whether a company has enough sales to keep up with its inventory purchases and whether it needs to adjust its purchasing strategy. Profit margin, return on assets, and times interest earned are profitability, efficiency, and coverage ratios, respectively.

Which Is a Liquidity Activity Ratio