Question:
Ratios that are calculated for measuring the efficiency of operations of the business based on effective utilization of resources are known as _______
Ratios that are calculated for measuring the efficiency of operations of the business based on effective utilization of resources are known as _______
Updated On: Jul 4, 2025
- Profitability ratios
- Solvency ratios
- Turnover ratios
- Liquidity ratios
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The Correct Option is C
Solution and Explanation
The correct answer is (C) Turnover ratios.
Explanation: Turnover ratios measure how efficiently a business is utilising its resources to generate sales or revenue. These ratios include:
Inventory Turnover Ratio – how quickly inventory is sold.
Debtors Turnover Ratio – how quickly receivables are collected.
Total Assets Turnover Ratio – how efficiently total assets generate revenue. Higher turnover ratios generally indicate better operational efficiency.
Explanation: Turnover ratios measure how efficiently a business is utilising its resources to generate sales or revenue. These ratios include:
Inventory Turnover Ratio – how quickly inventory is sold.
Debtors Turnover Ratio – how quickly receivables are collected.
Total Assets Turnover Ratio – how efficiently total assets generate revenue. Higher turnover ratios generally indicate better operational efficiency.
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