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About the subject
Activity ratio is an essential parameter used to assess the performance of a firm based upon the use of its finance or assets. It is also used to determine leverage of a company or contrast it with those of others. This is a direct measure of the success or yearly profit of a business organization. It measures how efficiently a particular company recovers profits for every resource, asset or finance that it leases or sells out.
Being very analytic in nature, this subject is essentially built on underlying concepts of operation research, mathematics, accounting as well as logical reasoning. Such a study is not just limited to commerce, it is also widely studied in economics as activity ratio is an important technique used to carry out financial analysis.
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