Identify the type of ratio that measures how productive a particular asset is in producing sales activity.

Question

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The type of ratio that measures how productive a particular asset is in producing sales activity is an activity ratio. Activity ratios are used to measure how effectively a company is using its assets to generate revenue, and include ratios such as inventory turnover, accounts receivable turnover, and asset turnover. Profitability ratios measure how much profit a company is generating relative to its revenue, while leverage ratios measure a company's debt levels and its ability to meet its debt obligations. Current ratios measure a company's liquidity and its ability to meet its short-term obligations.

Identify the Type of Ratio That Measures How Productive a Particular