Which of the following ratios evaluates management's use of resources?
A) Short-term solvency ratio
B) Long-term solvency ratio
C) Activity ratio
D) Profitability ratio
E) Equity ratio

Question

Quizplus · Accepted Answer

Activity ratios evaluate management's use of resources, as they measure how efficiently a company is using its assets to generate revenue. Short-term solvency ratios measure a company's ability to meet its short-term debt obligations, long-term solvency ratios measure a company's ability to meet its long-term debt obligations, profitability ratios measure a company's ability to generate profits from its operations, and equity ratios measure the amount of shareholder equity in the company compared to its total assets.

Which of the Following Ratios Evaluates Management's Use of Resources