CFA Practice Question

There are 534 practice questions for this study session.

CFA Practice Question

Inventory turnover and debt/equity ratios are measures of ______.
A. operating performance and operating efficiency, respectively
B. operating efficiency and financial risk, respectively
C. liquidity and financial risk, respectively
Explanation: Inventory turnover is a measure of efficiency and debt/equity is a measure of financial risk.

User Contributed Comments 4

User Comment
danlan Operational efficiency ratios are all related to asset or equity.
MattNYC According to the CFA, Inventory TO is an activity ratio. There are 5 Liquidity Ratios:
1.) Current
2.) Cash
3.) Quick
4.) Defensive
5.) CCC (DOH+DOS-payables)
shis Check page 583/584 of Vol 3: Activity ratios are operating efficiency rations and inventory turnover is listed as one of the Activity ratios. So answer B is correct.
jpducros What do you call Defensive Ratio ?
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