Activity ratios reflect the speed with which resources are converted to cash or sales.
Option E is correct answer .
Activity ratios :
Activity ratios measure how well a firm uses its assets. They reflect the speed with which resources are converted to cash or sales. A frequently used activity ratio is inventory turnover. The inventory turnover ratio measures the speed with which inventory moves through the firm and is turned into sales.
What is a high activity ratio?
A high ratio indicates that a company is using its total assets very efficiently or that it does not own many assets, to begin with. A low ratio indicates that too much capital is tied up in assets and that assets are not being used efficiently in generating revenue.
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