What is the least appropriate explanation for the activity ratio? 1.If a company's resources are simply used several times, it is highly active. 2. The shorter the rotation period, the higher the rotation rate. 3.The high activity of a company means that the maximum effect is achieved with the minimum resource by the organic combination of resources. 4.The higher the turnover rate of receivables, the better the credit policy. 5.It is not necessarily desirable that the rotation rate is very high.

What is the least appropriate explanation for the activity ratio? 1.If a company's resources are simply used several times, it is highly active. 2. The shorter the rotation period, the higher the rotation rate. 3.The high activity of a company means that the maximum effect is achieved with the minimum resource by the organic combination of resources. 4.The higher the turnover rate of receivables, the better the credit policy. 5.It is not necessarily desirable that the rotation rate is very high.

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter12: Fainancial Statement Analysis

Section: Chapter Questions

Problem 44MCQ: When a Dupont analysis reveals that a company has much higher than average asset turnover and much...

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