________ ratios are a measure of the speed with which various accounts are converted into sales or cash.
A) Activity
B) Liquidity
C) Debt
D) Profitability

Question

Quizplus · Accepted Answer

Activity ratios, also known as efficiency or turnover ratios, measure how effectively a company uses its assets to generate revenue or cash flow. This includes ratios like inventory turnover, accounts receivable turnover, and accounts payable turnover. They are a good indicator of a company's operational efficiency and can help identify areas where improvements can be made. Liquidity ratios measure a company's ability to meet its short-term obligations, debt ratios measure a company's leverage and ability to repay its debts, and profitability ratios measure a company's ability to generate profits relative to its sales or assets.

________ Ratios Are a Measure of the Speed with Which