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    Question

    Which of the following is a classic efficiency

    ratio?
    A Inventory turnover Correct Answer Incorrect Answer
    B Current ratio Correct Answer Incorrect Answer
    C Debt-equity ratio Correct Answer Incorrect Answer
    D Return on equity Correct Answer Incorrect Answer

    Solution

    Efficiency ratios (or activity ratios) measure how effectively a company uses its assets. Inventory turnover is a key efficiency ratio.

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