Activity or Operation Ratios Concept
Activity or operation ratios form a type of economical-financial indicators that seek to measure the efficiency level in the company’s assets management. Usually activity ratios assume the form of rotation ratios (which represent the number of times that an asset transforms in sales on a certain period of time) or average deadlines (which represents the average time that an asset takes to be transformed in sales)
There are several types of operation ratios, standing out the following:
- Assets Rotation;
- Existences/Stocks Rotation;
- Clients Rotation;
- Average Receipts Deadline;
- Average Existences/Materials in Stock Deadline;
- Average Payment Deadline.
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