- Activity Ratio
- Accounting ratios that measure a firm's ability to convert different accounts within their balance sheets into cash or sales.
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.
Investment dictionary. Academic. 2012.
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