________ Ratios Measure the Efficiency with Which Assets Are Converted

question 39

Multiple Choice

________ ratios measure the efficiency with which assets are converted to sales or cash.

• A) Liquidity
• B) Activity
• C) Profitability
• D) Market
• E) Financing

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Definitions:

Merchandise

Goods bought and sold by retailers.

Cash Collections

The process of gathering monies that are owed to a business by its customers or clients.

Beginning Inventory

The value of goods available for sale at the start of an accounting period, prior to any purchases or production during the period.

Ending Inventory

The value of goods available for sale at the end of an accounting period after goods sold are subtracted.