Liquidity ratios have to do with the ability of the company to pay its short-term liabilities as the become due. Activity ratios measure the ability of the company to manage its resources efficiently, specifically the current assets of accounts receivable and inventory, and to manage its accounts payable effectively. The average collection period is a measure of activity.
Liquidity ratios have to do with the ability of the company to pay its short-term liabilities as the become due. Activity ratios measure the ability of the company to manage its resources efficiently, specifically the current assets of accounts receivable and inventory, and to manage its accounts payable effectively. The accounts receivable turnover ratio is a measure of activity.
Liquidity ratios have to do with the ability of the company to pay its short-term liabilities as the become due. Activity ratios measure the ability of the company to manage its resources efficiently, specifically the current assets of accounts receivable and inventory, and to manage its accounts payable effectively. Times interest earned measures neither the ability to pay current liabilities nor the company's management of its resources and its accounts payable.
Liquidity ratios have to do with the ability of the company to pay its short-term liabilities as the become due. Activity ratios measure the ability of the company to manage its resources efficiently, specifically the current assets of accounts receivable and inventory, and to manage its accounts payable effectively. The merchandise inventory turnover is a measure of activity.
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