What are 'Activity Ratios'
Activity ratios are accounting ratios that measure a firm's ability to convert different accounts within its balance sheets into cash or sales. Activity ratios are used to measure the relative efficiency of a firm based on its use of its assets, leverage or other such balance sheet items. These ratios are important in determining whether a company's management is doing a good enough job of generating revenues, cash, etc. from its resources.
BREAKING DOWN 'Activity Ratios'
Companies will typically try to turn their production into cash or sales as fast as possible because this will generally lead to higher revenues. Such ratios are frequently used when performing fundamental analysis on different companies. The total assets turnover ratio and inventory turnover ratio are two popular examples of activity ratios used widely across most industries.

Current Ratio
The current ratio is a liquidity ratio measuring a company's ... 
Ratio Analysis
A ratio analysis is a quantitative analysis of information contained ... 
Cash Asset Ratio
The current value of marketable securities and cash, divided ... 
Accounting Ratio
A way of expressing the relationship between one accounting result ... 
Efficiency Ratio
Ratios that are typically used to analyze how well a company ... 
Cash Ratio
The ratio of a company's total cash and cash equivalents to its ...

Investing
Ratio Analysis
Ratio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ... 
Fundamental Analysis
Understanding Activity Ratios
Activity ratios measure how effectively a business uses its assets. 
Fundamental Analysis
Efficiency Ratio
There are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ... 
Fundamental Analysis
Dynamic Current Ratio: What It Is And How To Use It
Learn why this ratio may be a good alternative to the current, cash and quick ratios. 
Forex Education
6. Analyze With Ratios
Learning to read the balance sheet can provide great insight into the financial strength of a company. 
Investing Basics
Analyze Investments Quickly With Ratios
Make informed decisions about your investments with these easy equations. 
Investing Basics
Do Your Investments Have ShortTerm Health?
If a company is strong enough to survive tough times, it is more likely to provide longterm value. 
Trading Strategies
Financial Ratios to Spot Companies Headed for Bankruptcy
Obtain information about specific financial ratios investors should monitor to get early warnings about companies potentially headed for bankruptcy. 
Investing
Asset Turnover Ratio
Investopedia explains: The asset turnover ratio is a measure of a company's ability to use its assets to generate sales or revenue, and is a calculation of the amount of sales or revenue generated ... 
Markets
Operating Performance Ratios: Introduction
By Richard Loth (Contact  Biography)The next series of ratios we'll look at in this tutorial are the operating performance ratios. Each of these ratios have differing inputs and measure different ...

What do efficiency ratios measure?
Learn about efficiency ratios, what they measure, how to calculate commonly used efficiency ratios and how to interpret these ... Read Answer >> 
Which financial ratios are considered to be efficiency ratios?
Learn about efficiency ratios, what financial ratios are considered efficiency ratios, and how to calculate three different ... Read Answer >> 
How do stock dividends affect the retained earnings account?
Understand the difference between financial ratio analysis and accounting ratio analysis. Learn why ratio analysis is important ... Read Answer >> 
How do I use ratios to perform a financial analysis?
Learn which ratios are used in fundamental analysis. Find out how analysts measure company performance and financial health ... Read Answer >> 
What is the difference between efficiency ratios and profitability ratios?
Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >> 
Why are efficiency ratios important to investors?
Learn about efficiency ratios, such as the asset turnover ratio, and why these metrics are important to investors when analyzing ... Read Answer >>