_____ measures sales volume in relation to the investment in assets.Multiple ChoiceProfit marginAsset turnoverInventory turnoverReturn on assets

Break Down the Problem

1. Identify what the question is asking: It measures sales volume in relation to the investment in assets.
2. Evaluate each option to see which one aligns with this description.

Relevant Concepts

• Profit Margin: Measures how much out of every dollar of sales a company actually keeps in earnings.
• Asset Turnover: A financial ratio that measures the efficiency of a company's use of its assets to generate sales revenue.
• Inventory Turnover: Measures how many times a company sells and replaces its stock of goods during a period.
• Return on Assets (ROA): Indicates how profitable a company is relative to its total assets, showing how efficient management is at using its assets to generate earnings.

Analysis and Detail

1. Profit Margin: This relates more to profit efficiency rather than sales volume relative to assets.
2. Asset Turnover: This specifically relates sales volume to asset investment, indicating how effectively a company uses its assets to generate sales.
3. Inventory Turnover: This focuses on the relationship between the cost of sold goods and inventory but does not directly measure sales to asset investment.
4. Return on Assets: While related to profits, it does not directly measure sales volume but rather focuses on the profit generated per asset.

Verify and Summarize

The correct answer should relate directly to sales volume compared to the investment in assets, which aligns with Asset Turnover.

Final Answer

Asset turnover measures sales volume in relation to the investment in assets.