What Is the Best Description of an Efficiency Ratio

question 72

Multiple Choice

What is the best description of an efficiency ratio?

• A) A measure of how well a company converts revenue into earnings
• B) A measure of how quickly a company processes accounts receivables
• C) A measure of a firm's return on assets (ROA)
• D) A measure of the efficiency of a company's logistics

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Definitions:

Equivalent Ratio

Ratios that represent the same relationship between two or more quantities, even if their numerals are different.

Smallest Term

The term with the least duration or the smallest numerical value in a series or equation.

Ratio

A mathematical correlation between two values indicating the frequency one number can be contained by the other.

Unknown Quantity

A variable or value in mathematics and science that is not specified or determined, often represented by letters such as x or y in equations.