The ratios that are specifically concerned with assessing the efficiency with which assets have been used by the business are the:
A) liquidity ratios.
B) efficiency ratios.
C) gearing ratios.
D) investment ratios.

Question

Quizplus · Accepted Answer

Efficiency ratios, such as asset turnover and inventory turnover, are designed to measure how effectively a company is using its assets to generate revenue. Liquidity ratios measure a company's ability to pay its debts in the short term, while gearing ratios assess a company's leverage and investment ratios relate to evaluating the returns on investments made by a company.

The Ratios That Are Specifically Concerned with Assessing the Efficiency