Which of the following is an indication of how efficiently a firm is using its resources?
A) Earnings per share
B) Debt
C) Activity ratio
D) Leverage
E) Profitability

Question

Quizplus · Accepted Answer

Activity ratios, such as inventory turnover or accounts receivable turnover, measure how efficiently a firm is using its resources to generate revenue. These ratios show how quickly a company is turning over its assets and can indicate if there are inefficiencies in the production or sales process. Earnings per share, debt, leverage, and profitability are important measurements but do not directly indicate resource efficiency.

Which of the Following Is an Indication of How Efficiently