Question

State true or false with reason.

Activity Ratios Turnover Ratios are the same.

Options

• True

• False

Answer 1

This statement is True.

Turnover ratio is an efficiency ratio to check how efficiently company is using different assets to extract earnings from them. Activity ratio are financial analysis tools used to measure a business ability to convert its assets into cash. From both these definitions we can say that Activity ratios and Turnover ratios are same.