Advertisements
Advertisements
Question
What does activity ratio show?
Short Answer
Advertisements
Solution
Activity ratios measure how effectively a company uses its assets to create revenue. They contribute to operational efficiency by examining how quickly inventory is sold, how successfully receivables are recovered, and how well assets are used to generate sales. A higher activity ratio typically suggests better asset management, whilst a lower ratio may indicate inefficient resource usage.
shaalaa.com
Is there an error in this question or solution?
