The best measure of managerial efficiency in the use of investments in assets is:
A) rate of return on stockholders' equity.
B) rate of return on investment.
C) operating income.
D) inventory turnover.

Question

Quizplus · Accepted Answer

The rate of return on investment (ROI) measures the efficiency of a manager in using the company's assets to generate profits. It shows the amount of profit earned in relation to the amount invested in assets. A higher ROI indicates better efficiency in asset utilization. Choices A, C, and D may provide some insight into managerial efficiency, but they do not specifically measure the efficiency of asset utilization.

The Best Measure of Managerial Efficiency in the Use of Investments