Which of These Is Not an Efficiency Ratio

question 56

Multiple Choice

Which of these is not an efficiency ratio?

• A) current ratio
• B) asset turnover period
• C) average inventory turnover period
• D) average settlement period for debtors

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Definitions:

Direct Costs

Costs that can be directly attributed to the production of specific goods or services, such as labor or materials.

Cost Object

Any item for which costs are measured and assigned, including products, services, projects, or customers.

Manufacturing Costs

The total expenses related to producing goods, including raw materials, labor, and overhead expenses.

Expense

Outflows of economic resources or the incurring of liabilities (or a combination of both) during a period due to the production of goods, rendering of services, or other activities that constitute the entity’s ongoing major operations.