'These ratios are calculated for measuring the efficiency of operation of business based on effective utilisation of resources.' Identify and choose the correct option.
This question was previously asked in
Shift 25/05/2023 8:30 AM - 10:30 AM
A
Liquidity Ratios
B
Solvency Ratios
C
Activity Ratios
D
Profitability Ratios
Correct Answer
Activity Ratios
Detailed Explanation
The ratios calculated for measuring the efficiency of the operation of a business based on the effective utilization of resources are Activity Ratios.
Activity ratios, also known as turnover ratios, assess how well a company utilizes its assets, such as inventory, accounts receivable, and fixed assets, to generate sales and revenue. These ratios provide insights into the efficiency and effectiveness of a company's operations.
So, the correct option is:
3. Activity Ratios
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