What category of ratios measures how effectively a firm can maintain its economic position in the growth of the economy and industry?
A) profitability
B) liquidity
C) leverage
D) activity
E) growth

Question

Quizplus · Accepted Answer

The category of ratios that measures how effectively a firm can maintain its economic position in the growth of the economy and industry is growth ratios. These ratios include measures such as sales growth, earnings growth, and asset growth. They provide an indication of how well the firm is adapting to changes in the market and whether it is able to keep pace with industry growth. Profitability, liquidity, leverage, and activity ratios are all important but focus on different aspects of a firm's financial health.

What Category of Ratios Measures How Effectively a Firm Can