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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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