Question
Activity Ratios are meant to
indicate:Solution
Activity ratios are financial ratios used to gauge how efficient a company's operations are . It helps in analysing how efficiently the company utilises its resources to operate efficiently i.e. how efficiently it converts its assets into profits. They are also known as turnover ratios or efficiency ratios. Examples of activity ratios include accounts receivables turnover, inventory turnover, working capital turnover, total assets turnover, etc.
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