Efficiency (activity) ratios - Introduction

The efficiency analysis is sometimes called the management efficiency analysis or economic activity analysis. It includes the assessment of the productivity (turnover) of assets and capital used by the company. Productivity analysis is based on the ratios relating the achieved results on sales (or costs of obtaining them) to the levels of assets and capital used in the company. The group of these ratios allows to assess the efficiency of assets management, which affects both the financial liquidity and long-term profitability.

The group of efficiency (activity) ratios includes: