Which of the following measures the overall effectiveness of management in generating profits with its available assets?
A)return on investment
B)economic order quantity
C)target-on-sales
D)retained earnings

Question

Quizplus · Accepted Answer

Return on investment (ROI) measures how efficiently a company is utilizing its assets to generate profits. It is a key financial ratio that shows the percentage of profit earned on the total investment made in the business. Therefore, ROI is the most appropriate measure to assess the effectiveness of management in generating profits with available assets. Economic order quantity (B) is a measure of inventory management, target-on-sales (C) measures revenue targets, and retained earnings (D) show the portion of a company's profit that has been kept for reinvestment.

Which of the Following Measures the Overall Effectiveness of Management