What is measured by asset management?

Asset management primarily measures how efficiently a company utilizes its assets to generate sales. This involves assessing various metrics, such as turnover ratios, which indicate how well the firm converts its assets into revenue. By focusing on this efficiency, asset management provides insight into operational effectiveness and resource allocation.

When management demonstrates strong asset management, this typically leads to increased sales without a proportional increase in asset usage. For instance, high asset turnover ratios suggest that a company is generating a significant amount of sales from its existing assets, indicating effective management practices.

While aspects such as valuing assets, overall operating profit, and debt recovery are important in a comprehensive analysis of a company’s financial health, they do not specifically pertain to asset management. Valuing assets relates more to accounting practices than operational effectiveness. Operating profit gives a broader view of profitability but doesn't focus narrowly on asset usage, and the ability to recover debts relates more to credit management than to how assets are employed to drive sales.