Which of the following is an example of an activity ratio?
A) inventory turnover ratio
B) acid-test ratio
C) debt-to-equity ratio
D) current ratio
E) debt-to-assets ratio
Answer: A
Explanation: Activity ratios analyze how well a company is managing and making use of its assets. The inventory turnover ratio, which measures how fast a company's inventory is turned into sales, is an example of an activity ratio.
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