Liquidity ratios are used to determine a debtors ability to pay off his current debt obligations without having to raise extra capital. Liquidity ratio can be calculated using metrics such as Current ratio, quick ratio, operating cash flow ratio.
Activity Ratios are those financial ratios that measure a firms ability to convert to convert its assets into cash or sales. Activity ratios measure the relative efficiency of a firm based on its use of its assets and are important in determining whether a company's management is doing a good enough job of generating revenues and cash from its resources. These Ratios are also known as efficiency ratios. Examples of activity turnover ratio include Inventory turnover ratio and Assets turnover ratio.