Practice Efficiency or Activity Ratios - 19.2.4 | 19. Financial Statement Analysis – Ratio Analysis | Management 1 (Organizational Behaviour/Finance & Accounting)
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Practice Questions

Test your understanding with targeted questions related to the topic.

Question 1

Easy

What formula is used for the Inventory Turnover Ratio?

💡 Hint: Consider how quickly inventory moves through the business.

Question 2

Easy

What does a high Debtors Turnover Ratio indicate?

💡 Hint: Think about how this affects cash flow.

Practice 4 more questions and get performance evaluation

Interactive Quizzes

Engage in quick quizzes to reinforce what you've learned and check your comprehension.

Question 1

What is the Inventory Turnover Ratio?

  • Cost of Goods Sold / Average Inventory
  • Net Sales / Average Accounts Receivable
  • Total Assets / Net Sales

💡 Hint: Remember how inventory relates to cost management.

Question 2

True or False: A higher Debtors Turnover Ratio is generally seen as positive.

  • True
  • False

💡 Hint: Consider the impact on cash flow.

Solve 1 more question and get performance evaluation

Challenge Problems

Push your limits with challenges.

Question 1

A tech startup has net sales of $1,500,000, with total assets of $750,000, average accounts receivable of $100,000, and cost of goods sold of $900,000. Calculate the Inventory Turnover Ratio, Debtors Turnover Ratio, and Total Asset Turnover Ratio.

💡 Hint: Use the respective formulas for each ratio.

Question 2

Discuss the impact on a company's operational strategy if its Total Asset Turnover Ratio drops significantly over two years.

💡 Hint: Consider what that means for sales and future profitability.

Challenge and get performance evaluation