Question

The important activity ratios calculated under Activity (or Turnover) Ratios are ______?

Options

• Stock Turnover; & Investment (Net Assets) Turnover

• Debtors (Receivable) Turnover; & Fixed Assets Turnover

• Creditors (Payable) Turnover; & Working Capital Turnover

• All of the above

Answer 1

All of the above.

Explanation:

The turnover ratios fundamentally show the activity levels that are characterized by the business's ability to make more sales or turnover. The activity ratios represent the number of times assets employed, or any component of assets, are converted into sales during an accounting period. Higher turnover ratios indicate better asset use and thus improved efficiency and profitability, and are thus known as efficiency ratios.