What is a key indicator of a company's financial performance related to investment?

The average rate of return (ARR) is indeed a key indicator of a company's financial performance, particularly in terms of investment. ARR measures the profitability of an investment by calculating the average annual profit as a percentage of the initial investment cost. This metric helps stakeholders assess the efficiency and viability of an investment, making it essential for comparing different investment opportunities, evaluating project performance, and making informed financial decisions.

Higher ARR values indicate better returns on investment, thus signaling effective use of resources and potential for growth. In contrast, other options, such as employee satisfaction, customer loyalty, and market expansion, are important for overall business health and strategic planning but do not directly measure financial performance related to investment. These factors may influence financial performance indirectly, yet they do not provide a quantitative assessment of investment returns as ARR does.