Activity Ratio
Accounting ratios that measure a firm's ability to convert different accounts within their balance sheets into cash or sales. Investopedia Says:
Companies will typically try to turn their production into cash or sales as fast as possible because this will generally lead to higher revenues.
Such ratios are frequently used when performing fundamental analysis on different companies. The asset turnover ratio and inventory turnover ratio are good examples of activity ratios. Related Terms:
Accounting
Asset
Asset Turnover
Balance Sheet
Fundamental Analysis
Inventory
Inventory Turnover
Receivables Turnover Ratio
Revenue |