Activity Ratios

Activity ratios measures how efficient a firm is at using the firm's resources. Activity ratios are an extension of the liquidity ratios discussed earlier. The following ratios examine the "liquidity" of some of the more important current accounts. Since actitivty ratios are variable depending on a particular company, these ratios are best analyzed using industry averages.

Turnover

Turnover is defined as the number of times a stock or item is ordered, used, and restock in a give time period, usually a year.