Activity Ratio Homework Help

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Activity ratio is a beneficial measurement process that monitors the capitals of the firm that involve monetary assets. It measures the relative efficiency of any firm by taking its balance sheet components into account. It is given in Activity Ratio Homework Help that Activity Ratio can be used for the evaluation of the long-term debt-paying capacity of any firm. It can be used to find out one company’s dominance over another. The basic concepts of Activity Ratio are mentioned in Activity Ratio Homework Help which are mathematics, logical reasoning and operational research.
 

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Advantages of Activity Ratio

 

Activity Ratio helps the interested parties to make assessment of a certain firm’s running. Apart from this there are many advantages of Activity Ratio which are mentioned in Activity Ratio Homework Help. These are
 

• Forecasting and Planning- Using the previous accounting figures, the inclination in sales, profits, costs and other facts can be determined by finding out computing ratios.
 

• Budgeting- Activity Ratio is useful in preparations of the future budgets using the past experiences.
 

• Inter – firm Comparison- The performance of two or more firms can be compared and identified as effective or ineffective companies. This would persuade the inefficient firms to undertake suitable measures to improve the company’s efficiency.
 

• Indication of Overall Profitability- It is important for the firm to meet the short – term and long – term requirements of the client. According to Activity Ratio Homework Help, this ratio is helpful in identification of the requirements.
 

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