What is meant by 'Activity Ratios'?

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#### Solution

Activity Ratios measures the effectiveness with which a firm uses its available resources. Higher the activity ratio means better the use of capital or resources of the business. Some of the important Activity Ratios are Inventory Turnover Ratio, Debtors Turnover Ratio, Working Capital Turnover Ratio, Current Assets Turnover Ratios etc.

Concept: Activity Ratios - Inventory Turnover Ratio

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