If a manager wanted to spot check inventory over an extended period of time and then make plans for needed changes,he/she would use ____________ ratios.
A)profitability
B)debt
C)activity
D)current

Question

Quizplus · Accepted Answer

Activity ratios, such as inventory turnover and days sales outstanding, measure the efficiency of a company's operations. By spot checking inventory over an extended period of time and comparing it to sales, a manager can identify if inventory levels are too high or low and make necessary changes to improve efficiency. Profitability ratios measure a company's overall profitability, debt ratios assess a company's leverage, and current ratios evaluate a company's liquidity. While these ratios are important, they may not be as relevant for identifying changes needed in inventory levels.

If a Manager Wanted to Spot Check Inventory Over an Extended