Which ratio would be considered an activity ratio?
A) debt-to-equity
B) net profit margin
C) average collection period
D) earnings per share
E) current ratio

Question

Quizplus · Accepted Answer

Activity ratios are used to measure a company's efficiency in managing its assets, and the average collection period is an activity ratio that measures the average number of days it takes a company to collect its accounts receivable. The other options listed are financial ratios that measure a company's financial position or profitability.

Which Ratio Would Be Considered an Activity Ratio