Which of the following is included in activity ratios of a company?

A) Interest coverage ratio
B) Earning per share
C) Inventory turnover ratio
D) Proprietary ratio
E) Working Capital turnover ratio

Choose the correct answer from the options given below.

C & E

The correct answer is option 2- C & E.

A) Interest coverage ratio- Solvency ratio
B) Earning per share- Profitability ratio
C) Inventory turnover ratio- Activity ratio
D) Proprietary ratio- Solvency ratio
E) Working Capital turnover ratio- Activity ratio

Activity ratios express the number of times assets employed, or, for that matter, any constituent of assets, is turned into sales during an accounting period. Higher turnover ratio means better utilisation of assets and signifies improved efficiency and profitability, and as such are known as efficiency ratios. The important activity ratios calculated under this category are-
1. Inventory Turnover;
2. Trade receivable Turnover;
3. Trade payable Turnover;
4. Investment (Net assets) Turnover
5. Fixed assets Turnover;
6. Working capital Turnover.
7. Current assets turnover