January 2018
Beginner
976 pages
142h 14m
English
LG3
Activity ratios measure the speed with which various asset and liability accounts are converted into sales or cash. Activity ratios measure how efficiently a firm operates along a variety of dimensions, such as inventory management, disbursements, and collections. A number of ratios measure the activity of the most important current accounts, which include inventory, accounts receivable, and accounts payable. We can use ratios to assess the efficiency with which a firm manages its total assets as well.
For firms whose business involves holding significant inventory balances, the inventory turnover ratio is a metric used by analysts to judge the effectiveness of inventory management practices. Here ...
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