Question

Ratios that are calculated for measuring the efficiency of operations of the business based on effective utilization of resources are known as _______

• A. Profitability ratios
• B. Solvency ratios
• C. Turnover ratios
• D. Liquidity ratios

Answer 1

The Correct Option is C

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.