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

Marginal and absorption costing, How marginal costing would improve the pro...

How marginal costing would improve the problems faced in absorption costing on manipulation of profits.

Periodic system and a perpetual system, Your manager has informed you that ...

Your manager has informed you that the company is trying to determine if it should use a periodic system or a perpetual system in accounting for the inventory. He wants you to spea

Job-order costing, #quesXERCISE 3-15 Departmental Overhead Rates [LO1, LO2,...

#quesXERCISE 3-15 Departmental Overhead Rates [LO1, LO2, LO3] Diewold Company has two departments, Milling and Assembly. The company uses a job-order costing system and computes a

Benefits/ disadvantages of the costing techniques , Question 1 A healt...

Question 1 A healthcare company specializes in hip, knee and shoulder replacement operations, known as surgical procedures. As well as providing these surgical procedures, the

Graphic analysis, Graphic Analysis Whenever you have two data points, you...

Graphic Analysis Whenever you have two data points, you should generally suppose a linear relationship. When you acquire more data, you can study the data to determine when there

International management challenges of globalization., what is the topic ab...

what is the topic about? what are the practical implications? what are the practical criticisms?

Xs strategy, X's Strategy X will like to divide his play between his ro...

X's Strategy X will like to divide his play between his rows in such a way that his expected winnings or losses when Y plays the first column will be equal to his expected winn

Capital budgeting – planning investments, Project C would involve a current...

Project C would involve a current outlay of $50,000 on equipment and $15,000 on working capital. The investment in working capital would be increased to $21,000 at the end of the f

Hold-up problem or another problem, According to the Philadelphia Inquirer,...

According to the Philadelphia Inquirer, in 2004 the city of Philadelphia planned to spend $14 million to convert the Convention Center into an appropriate venue for the Republican

Illustrate the marginal cost pricing, Marginal cost or incremental cost pri...

Marginal cost or incremental cost pricing method: Here the company may work on the premise of recovering its marginal cost and getting a contribution towards its overheads. Thi

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