Question

Rosa, an entrepreneur, wants to measure the overall health of her small business by using a form of ratio analysis. Her chosen method requires her to measure how often she must restock her firm's inventory, examine how quickly her firm can turn credit sales into cash, and measure the productivity of her firm's fixed assets. In this scenario, the ratio analysis method chosen by Rosa requires the measurement of her firm's _____.

Answer 1

activity ratios

Step-by-step explanation:

Activity ratios are various metrics that are used to see how efficient the operations of a business are in using their capital and assets.

Activity ratios include: stock turnover, debtors turnover ratio, working capital turnover ratio, investment turnover ratio, and so on.

In the given scenario where Rosa wants to measure how often she must restock her firm's inventory, examine how quickly her firm can turn credit sales into cash, and measure the productivity of her firm's fixed assets.

She needs to measure her activity ratios