__________ 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 how efficiently a company is using its resources to generate revenue. It reflects the firm's internal performance with respect to key activities defined by management, such as inventory management, accounts receivable collection, and asset utilization. Activity ratios include inventory turnover, accounts receivable turnover, and asset turnover ratios. The other options listed are all different types of financial ratios but do not specifically measure internal performance with respect to key activities defined by management.

__________ Is a Ratio That Measures the Firm's Internal Performance