Asked by Mackenzie Nelson on May 18, 2024

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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

Investment Turnover

A measure of a company's efficiency in using its assets to generate sales or revenue; the ratio of the cost of goods sold to the average inventory.

Managerial Efficiency

The effectiveness with which managers utilize resources and make decisions to achieve the organization's goals.

Investments In Assets

Financial activities involving the purchase of assets with the expectation that they will generate income or appreciate in the future.

  • Implement the principle of investment turnover and analyze its effects on the return on investment.
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AR
Amber R RodriguezMay 22, 2024
Final Answer :
B
Explanation :
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.