Question:
Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources are called :
Ratios that are calculated for measuring the efficiency of operations of business based on effective utilisation of resources are called :
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Activity Ratios are also known as efficiency or turnover ratios, focusing on the utilisation of assets and resources.
Updated On: Jan 14, 2026
- Activity Ratios
- Profitability Ratios
- Solvency Ratios
- Liquidity Ratios
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The Correct Option is A
Solution and Explanation
Activity ratios measure how efficiently a business utilizes its assets and resources to generate revenue. These include Inventory Turnover Ratio, Debtors Turnover Ratio, etc. These ratios are helpful in evaluating the effectiveness of management’s operations and use of capital.
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