Which ratio is calculated in terms of time ?
A. Profitability
B. Liquidity
C. Activity
D. Solvency
Answers
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Answer:
activity is calculated in terms of time
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Activity Ratio is calculated in terms of time.
Explanation:
- Activity ratio is calculated for the conversion of stock into cash, which means how long does the stock take to get converted into cash.
- Activity ratio includes the inventory turnover ratio, account receivable ratio, fixed asset turnover ratio, total asset turnover ratio, creditors turnover ratio.
- Activity ratio is related to time because its conclusions always show the answers in days, weeks, or months.
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