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What is Activity Ratio?

12. What is Activity Ratio?

1. Financial Ratios that measure a firm's ability to convert different accounts into a balance sheet.
2. Ratios that measure a company's ability to pay debt obligations and its margin of safety.
3. Financial measurements that assess the ability of a company to meet its financial obligations
4. The ratio that evaluates the company's ability to generate income as compared to its expenses.

Answer: A) Financial Ratios that measure a firm's ability to convert different accounts into a balance sheet

Explanation:

Activity Ratios are a category of financial ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales.