_____ ratios measure how productive a particular asset is in producing sales movement.

Question

Quizplus · Accepted Answer

Activity ratios measure how efficiently a company is able to use its assets to generate sales. Therefore, the best choice is activity ratios. The other options are incorrect: 
- Current ratios measure a company's ability to pay its short-term obligations
- Profitability ratios measure a company's ability to generate profit from its operations
- Leverage ratios measure a company's level of debt and its ability to meet its debt obligations.

_____ Ratios Measure How Productive a Particular Asset Is in Producing