Activity Ratio
An activity ratio measures the efficiency and effectiveness of an organization’s operations by comparing various activity metrics. Common activity ratios include inventory turnover, accounts receivable turnover, and asset turnover. These ratios provide insights into operational performance and help identify areas for improvement.
Related glossary terms
Activity-Based Costing (ABC)
Activity-Based Costing (ABC) allocates overhead to activities by resource use. It gives more accurate cost data than traditional costing to support decisions.
Activity Driver
An activity driver—such as labor or machine hours—determines an activity's cost. In ABC costing, drivers allocate costs based on resource consumption.
Activity Level
Activity level is the volume of operations in a period—units produced or transactions processed. It guides cost management and resource allocation in logistics.
Key Performance Indicator (KPI)
Key Performance Indicator (KPI) is a measurable logistics metric—such as on-time delivery rate or inventory turnover—used to evaluate and guide operational…
