I consider the efficiency ratios to be the ratios also known as asset turnover ratios , activity ratios , or asset management ratios .
These efficiency ratios include 1) accounts receivable turnover ratio , and the related ratio days' credit sales in accounts receivable; 2) inventory turnover , and the related ratio days' cost of sales in inventory ; 3) total asset turnover ; and 4) fixed asset turnover .
The accounts receivable turnover ratio and the inventory turnover ratio are also used in the context of a firm's liquidity.
The total asset turnover and fixed asset turnover are indicators of a company's effectiveness in utilizing its assets.
