Ratios That Measure How Effectively an Entity Is Using Is

question 76

Multiple Choice

Ratios that measure how effectively an entity is using is assets are called

• A) liquidity ratios.
• B) activity ratios.
• C) solvency ratios.
• D) profitability ratios.

---

Definitions:

Prospective

Pertains to future events or conditions as they are expected to happen or be considered for planning and decision-making.

Depreciation Parameters

The set of assumptions and methodologies used to calculate the depreciation of an asset over its useful life.

Tangible Assets

Physical and material assets, such as buildings, machinery, and equipment, which are owned by a business and can be seen and touched.

Natural Resource

Assets that occur naturally in environments such as minerals, timber, and oil, often subject to depletion and depreciation over time.