The financial managers of a company closely follow indicators of the company's performance with respect to key activities defined by management. These indicators are called
A) debt ratios.
B) liquidity ratios.
C) cash flow ratios.
D) profitability ratios.
E) activity ratios.

Question

Quizplus · Accepted Answer

Activity ratios, also known as efficiency ratios or asset utilization ratios, measure how well a company uses its assets to generate revenue. They are key indicators of a company's performance in managing its assets efficiently.

The Financial Managers of a Company Closely Follow Indicators of the Company's