Which Ratio Would Be Considered an Activity Ratio

question 86

Multiple Choice

Which ratio would be considered an activity ratio?

• A) Debt-to-equity
• B) Net profit margin
• C) Average collection period
• D) Earnings per share
• E) Current ratio

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Definitions:

Earnings Per Share

A financial ratio that indicates the portion of a company's profit allocated to each outstanding share of common stock, serving as an indicator of a company's profitability.

IFRS

International Financial Reporting Standards, which are a set of accounting standards developed by the International Accounting Standards Board for global use.

Comprehensive Income

The total change in equity for a reporting period other than transactions from owners, encompassing all gains and losses that are not recognized in the profit or loss.

Retained Earnings Restrictions

Limitations or constraints placed on the amount of retained earnings that can be used for distribution to shareholders, often due to legal, contractual, or company policy reasons.