What does "Asset Utilization" measure?

"Asset Utilization" is a key metric that evaluates how effectively a company uses its assets to generate revenue. This involves analyzing the relationship between the revenue produced by the assets and the total capacity of those assets. High asset utilization indicates that a business is making the most of its resources, maximizing productivity and revenue generation from existing investments.

Efficiency in using assets to generate revenue encompasses various factors, including production volume, asset turnover, and operational efficiency. By measuring this aspect, businesses can identify opportunities for improvement, strategize for enhanced performance, and ultimately drive profitability.

The other options focus on different aspects of business operations, such as employee productivity, costs related to acquiring assets, and market demand — none of which directly relate to the effectiveness with which assets contribute to revenue generation. Thus, the focus on efficiency in generating revenue makes this choice the most appropriate to define "Asset Utilization."