### Solutions to Activity Analysis Ratio Problems – Accounting Homework Help – Assignment Help

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Importance of Activity Analysis Ratio (Accounting) in Academic Curriculum

Activity Analysis Ratios are criteria which are used for adjudging the efficacy of a company or organization regarding its profitability.  It deals with the amount to be received in the form of debt recovery or other profit shares by the enterprise, with calculations of the period over which the amount could be collected, with a better profit margin for the concern.  This is vital for students of accounting as they should be thorough with the aspects of activity analysis ratio such as accounts receivable turnover and inventory turnover. These terminologies are important to understand the capital turnover of the company and thereby master the accounts.

Difficulties faced by student while solving Activity Analysis Ratio (Accounting) problems

Students of accounting commonly face the dilemma of how to calculate the activity analysis ratios as per the assets invested by the company, how to relate the performance of the enterprise with the ratios obtained and the manner in which the sales of manufactured goods will bring about profit to the concern.  It also indicates the manner in which assets could be bought by converting products into sales.  These ratios are difficult to be recognized and identified by the students as they are the novice in the field of accounting.  The students may also find classifying the various ratios under the correct categories like receivables, inventory and sales.

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