Question

______ indicate the speed at which activities of the business are being performed.

Options

• Liquidity Ratios

• Turnover Ratios

• Solvency Ratios

• Solvency Ratios

Answer 1

Turnover Ratios indicate the speed at which activities of the business are being performed.

Explanation:

Turnover Ratios, also called activity or efficiency ratios, measure the speed and frequency with which a business converts its operational assets, like inventory or receivables, into sales or cash. They reflect how effectively a firm manages its day-to-day resources to generate revenue. While liquidity ratios evaluate short-term cash availability and solvency ratios check long-term debt capacity, turnover ratios specifically track operational speed and resource utilisation.