Activity ratios are ratios with some measure of profit in the numerator and some measure of firm size or assets in the denominator.

Question

Quizplus · Accepted Answer

Activity ratios are ratios that measure a company's ability to convert different assets into cash or sales revenue. They do not necessarily have a measure of profit in the numerator, and the denominator typically involves some measure of activity or operations (such as sales or total assets).

Activity Ratios Are Ratios with Some Measure of Profit in the Numerator