Which of the following is a ratio that measures the firm's internal performance with respect to key activities defined by management?
A) A liquidity ratio
B) An activity ratio
C) Return on total assets
D) A current ratio
E) Profit margin on sales

Question

Quizplus · Accepted Answer

An activity ratio measures the firm's internal performance with respect to key activities such as inventory management, receivables collection, and asset utilization. Liquidity ratios such as the current ratio measure the firm's ability to meet short-term obligations, while return on total assets and profit margin on sales are profitability ratios.

Which of the Following Is a Ratio That Measures the Firm's