What is activity ratio, Managerial Accounting

Assignment Help:

What is Activity ratio

Funds are invested in several assets in business to make sales and earn profits. The efficiency with which assets are managed directly affects the volume of sales. The better the management of assets the larger is the amount of sales and profit. Activity ratios measure the efficiency or effectiveness with which a firm manages its resources or assets these ratio are called turnover ratios because they indicate the speed with which assets are converted or turned over into sales. It includes the following ratios.

1) Capital turnover ratio

2) Fixed assets turnover ratio

3) Working capital turnover ratio

4) Stock turnover ratio

5) Debtors turnover ratio (or receivables ratio)

6) Creditors turnover ratio(or payables turnover ratio)

 


Related Discussions:- What is activity ratio

Value chain analysis , VALUE CHAIN ANALYSIS Every firm is a collection...

VALUE CHAIN ANALYSIS Every firm is a collection of activities that are executed to design, generate, market, deliver and support its products or services. Value chain analysis

Explain kaizen costing, Explain Kaizen costing It is a Japanese method...

Explain Kaizen costing It is a Japanese method used to manage cost during a product s planning and design stages and has been used by some Japanese firms for over twenty years

Explain variable cost and fixed cost, Explain variable cost and fixed cost ...

Explain variable cost and fixed cost Variable costs: costs that vary almost in the direct proportion to the volume of production are known as variable costs. The examples of

Explain the cost oriental pricing policy, Cost oriental pricing policy ...

Cost oriental pricing policy Cost of production of a product is the most important variable and most important determinant of its price. There may type of costs such as-fixe

Long run shutdown point, what are the factors should be considered before ...

what are the factors should be considered before terminated the operation of a losing firm??

Explain decision unit - zero base budgeting, Explain decision unit - zero b...

Explain decision unit - zero base budgeting Decision units: an organization is divided among decision units. The manager of the decision unit justifies the relative budget

Explain indirect expanses, Explain Indirect expanses: These are expanse...

Explain Indirect expanses: These are expanses which can't be directly conveniently and wholly allocated to a specific cost centres or cost units examples of such expanses are h

Case study, 1 Describe the impact of different types of standards on motiva...

1 Describe the impact of different types of standards on motivations, and specifically, the likely effect on motivation of adopting the labor standard recommended for Geeta & Compa

Standard costing .., the applicability of standard costing in modern manufa...

the applicability of standard costing in modern manufacturing environments in volatile environments

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd