Adjusted scoring margin (ASM) calculations measure teams based on whether they score more or fewer points than their opponents on average give up, and vice versa. It's a somewhat similar theory to predictive power ratings but implemented in a different way. Every team has both an offensive and defensive ASM, and the sum of these two numbers is a team's overall ASM.
For example, imagine that at this point in the season, each of Team A's opponents has allowed an average of 95 points per game. However, Team A has scored an average of 100 points per game against that set of opponents. Team A's offensive ASM is therefore +5, which is a good thing. On average, Team A has scored five points more than its opponents typically give up.
Likewise, if Team A's opponents, on average, score 95 points a game, but manage to score 105 points a game against Team A, then Team A's defensive ASM is -10; that's not so good. (For consistency, we express good ASM's as positive numbers, and bad ones as negative numbers.) Team A's overall ASM is therefore an unimpressive -5, the sum of +5 and -10.
When two teams play each other, we can compare their respective ASM's to project the game's expected winner, win margin and final score, although you can get to those numbers a few different ways. ASM's accuracy tends to improve as more games are played.
Strengths: Looking at statistics in isolation often can be misleading, but adjusted scoring margins are relative measures. Giving up an average of 100 points a game may look bad compared to a league average, but not if you find out that the specific opponents a team has played actually average 110 points per game.
Weaknesses: The ASM method typically does not apply well when comparing teams with large differences in schedule strength. Holding a the Lakers to two points above its season average is probably a better performance than holding Memphis to 2 points below its season average.