Operating Performance Ratios, also known as activity ratios or efficiency ratios, measure the company’s effectiveness at managing its core operations. They are used to assess how well a business functions in terms of its ability to generate revenue, manage expenses, and use its assets efficiently. These ratios indicate how well a company is performing in comparison to other similar businesses and can provide important insights into a company’s financial status and future prospects. They can also be used to assess a company’s competitive edge in the market and help management make better informed decisions about its operations.