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:

Fund Replenishing

The process of adding money to a fund to restore its level after expenses have been incurred.

Making Payments

This process involves the transfer of funds from one party to another to settle a financial obligation or purchase.

Cash Equivalents

Investments with a short duration, easily turned into cash, and having an original maturity of no longer than three months, which are both highly liquid and quickly convertible into precise cash sums.

Short-Term Receivables

Current assets representing amounts due to be received by a company within a short period, typically within a year, from customers or clients.