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    Question

    Which ratios are a measure of the speed with which

    various accounts are converted into sales or cash?
    A Activity Correct Answer Incorrect Answer
    B Liquidity Correct Answer Incorrect Answer
    C Debt Correct Answer Incorrect Answer
    D Profitability Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    Activity ratios (or Turnover ratios) are calculated on the basis of either cost of revenue from operations or revenue from operations. It indicates the speed or the number of times the capital employed has been rotated in the process of doing business.

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