Activity Ratio:
It is also called as turnover ratio. This ratio measures the efficiency of the current assets
and liabilities in the business concern during a particular period. This ratio is helpful to
understand the performance of the business concern. Some of the activity ratios are given
below:
Stock Turnover Ratio = Cost of Sales / Average Inventory
Debtors Turnover Ratio = Credit Sales / Average Debtors
Creditors Turnover Ratio = Credit Purchase / Average Credit
Working Capital Turnover Ratio = Sales / Net Working Capital
It is also called as turnover ratio. This ratio measures the efficiency of the current assets
and liabilities in the business concern during a particular period. This ratio is helpful to
understand the performance of the business concern. Some of the activity ratios are given
below:
[Post Image Courtesy of Renjith Krishnan at FreeDigitalPhotos.net]
Stock Turnover Ratio = Cost of Sales / Average Inventory
Debtors Turnover Ratio = Credit Sales / Average Debtors
Creditors Turnover Ratio = Credit Purchase / Average Credit
Working Capital Turnover Ratio = Sales / Net Working Capital
Activity Ratio
![Activity Ratio]()
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