Activity ratio

The _________ is useful in evaluating credit and collection policies.

• A. Average payment period

• B. Current ratio

• C. Average collection period

The ___________ measures the activity of a firm’s inventory.

• A. average collection period

• B. inventory turnover

• C. liquid ratio

• D. current ratio

___________ are especially interested in the average payment period, since it provides them with a sense of the bill-paying patterns of the firm.

• A. Customers

• B. Shareholders

• C. Lenders and suppliers

The __________ ratios provide the information critical to the long run operation of the firm

• A. liquidity

• B. activity

• C. solvency

• D. profitability

Cost of goods sold is ___________

• Opening inventory +Purchases + Direct Expenses - Closing Stock

• Gross Profit - Net sales

• Opening inventory +Purchases - Direct Expenses - Closing Stock

• Net Sales - cost of good sold

Gross Profit = ____________

• Net sales - Gross profit

• Net sales -- COGS (Cost of Goods Sold)

• Net sales + COGS(Cost of Goods Sold)

Salary is a_________

• Indirect Expense

• Direct Expense

_________ ratios are a measure of the speed with which various accounts are converted into revenue from operations or cash:

• Solvency

• Activity

• Liquidity

The ___________ measures the activity of a firm’s inventory.

• Inventory Turnover

• Liquid Ratio

• Current Ratio

Cost of Revenue from operations and Revenue from operations are same

• True

• False