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

Question

Quizplus · Accepted Answer

Investment turnover measures how efficiently a company is using its assets to generate revenue. It is calculated by dividing net sales by the average total assets. Therefore, it is a better measure of managerial efficiency in the use of investments in assets compared to the other options listed. Return on stockholders' equity is a measure of profitability, income from operations is a measure of the company's ability to generate revenue after deducting operating expenses, and inventory turnover is a measure of how quickly a company sells its inventory. While these measures are important, they do not directly measure managerial efficiency in the use of investments in assets.

The Best Measure of Managerial Efficiency in the Use of Investments