Activity Ratios Measure

question 87

Multiple Choice

Activity ratios measure:

• A) The speed of changing assets into cash
• B) The degree to which a firm relies on borrowed funds in its operations
• C) How effectively a firm is using its various resources to achieve profits
• D) How well a company converts its resources to profits

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Definitions:

Indifferent

Having no particular interest or sympathy; being unconcerned or neutral towards a specific outcome or item.

Transitive Preferences

A principle in which if an individual prefers option A over B, and B over C, then they also prefer A over C.

Preferred

Indicating a greater liking for one alternative over another or others.

Marginal Rate

The rate at which a change is made from one level to another, often used in the context of taxes or interest rates.