How Do You Spell ACTIVITY RATIO?

Pronunciation: [aktˈɪvɪti ɹˈe͡ɪʃɪˌə͡ʊ] (IPA)

The word "activity ratio" is pronounced as [ækˈtɪvɪti ˈreɪʃioʊ]. The first syllable "ac" is spelled with the letter "a" because it is pronounced as the short-a sound. The second syllable "tiv" is spelled with the letter "i" and not "y" because it is pronounced with the short-i sound. The third syllable "ty" is spelled with the letters "ti" because it is pronounced as the long-e sound. The fourth syllable "ra" is spelled with the letter "a" because it is pronounced with the short-a sound. Finally, the last syllable "ti-o" is spelled with the letters "tio" because it is pronounced as a single syllable.

ACTIVITY RATIO Meaning and Definition

1. Activity ratio is a financial metric that measures the efficiency and effectiveness of a company's utilization of its resources and assets to generate sales revenue. It evaluates the company's ability to convert its assets into revenue and assesses how well it manages its inventory, accounts receivable, and accounts payable.

   The activity ratio is calculated by dividing a specific activity measure by the company's sales revenue. This ratio helps to gauge how productive and efficient the company is in generating sales for every unit of resource or asset employed. It provides insights into the company's operational performance and efficiency in utilizing its resources.

   There are several commonly used activity ratios, including inventory turnover ratio, accounts receivable turnover ratio, and accounts payable turnover ratio. The inventory turnover ratio indicates how well a company manages its inventory and measures the number of times the inventory is sold and replaced within a given period. The accounts receivable turnover ratio evaluates the efficiency of a company's credit sales and measures how quickly it collects its accounts receivable. Conversely, the accounts payable turnover ratio assesses how efficiently a company pays its suppliers and creditors.

   Activity ratios are crucial for determining the overall financial health of a company. High activity ratios indicate efficient management and effective use of resources, ultimately leading to increased profitability. On the other hand, low activity ratios can signify poor inventory management, ineffective credit and collection policies, or delayed payments to suppliers, resulting in potential financial difficulties or reduced profitability.

Common Misspellings for ACTIVITY RATIO

• zctivity ratio
• sctivity ratio
• wctivity ratio
• qctivity ratio
• axtivity ratio
• avtivity ratio
• aftivity ratio
• adtivity ratio
• acrivity ratio
• acfivity ratio
• acgivity ratio
• acyivity ratio
• ac6ivity ratio
• ac5ivity ratio
• actuvity ratio
• actjvity ratio
• actkvity ratio
• actovity ratio
• act9vity ratio
• act8vity ratio

Etymology of ACTIVITY RATIO

The term "activity ratio" does not have a specific etymology as it is a combination of two English words: "activity" and "ratio".

The word "activity" originates from the Latin word "activitas", which refers to the state of being active or engaged in action. The Latin root "actus" means "to do" or "to act". Over time, the word evolved in English to describe the quality or state of being busy, productive, or involved in a specific task.

The word "ratio" comes from the Latin word "ratus", which means "reckoned" or "calculated". It refers to a comparison or relationship between two or more quantities or values and is often expressed in the form of a quotient or fraction.

Plural form of ACTIVITY RATIO is ACTIVITY RATIOS