What is the Activity Ratio?
How Does the Activity Ratio Work?
Activity ratios assess how effectively a company is able to generate cash and sales based on its asset, liability and capital share accounts. Examples of such ratios include the inventory turnover ratio and the accounts receivable turnover ratio.in the form of
Why Does the Activity Ratio Matter?
Activity ratios are critical in evaluating a company's fundamentals because, in addition to expressing how well a company generates, activity ratios also indicate how well the company is being managed.