Activity ratios measure ________.
A) a firm's ability to pay short-term obligations using current assets
B) a firm's operating efficiency
C) a firm's ability to pay their debts and stay in business
D) a firm's ability to generate earnings relative expenses

Question

Quizplus · Accepted Answer

Activity ratios measure a firm's operating efficiency, which includes how well the company is managing its inventory, receivables, and payables. These ratios evaluate how efficiently a company is using its resources to generate sales and income.

Activity Ratios Measure ________