Question : Which of the following statements is false with respect to the Activity ratio?
Option 1: These ratios are known as turnover ratios.
Option 2: These ratios measure the efficiency and rapidity of the resources of the Company.
Option 3: These ratios are generally calculated on the basis of revenue from operations or cost of revenue from operations.
Option 4: None of the above
Correct Answer: None of the above
Solution : Answer - None of the above
All of these statements are true with respect to the
Turnover Ratio
. Activity ratios are known as turnover ratios and measure the efficiency of a company's resource utilization. These ratios assess the efficiency and speed of resource utilization based on revenue from operations or the cost of revenue from operations.
Hence, the correct option is 4.
