Liquidity ratios can be obtained from information on the balance sheet, while Activity Ratios require information obtained from the
A) income statement, balance sheet, and statement of cash flows.
B) balance sheet only.
C) income statement only.
D) income statement and balance sheet.
E) none of the above

Question

Quizplus · Accepted Answer

Activity ratios, such as inventory turnover or accounts receivable turnover, require data from both the income statement (to get sales or revenue figures) and the balance sheet (to get average inventory or average accounts receivable figures).

Liquidity Ratios Can Be Obtained from Information on the Balance