4. In the 5-Stage DuPont ROE formula, which of the following stages is considered to be...

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4. In the 5-Stage DuPont ROE formula, which of the following stages is considered to be...

4. In the 5-Stage DuPont ROE formula, which of the following stages is considered to be a relative measurement of how much long term debt there is on the balance sheet (i.e. a solvency ratio):

NI / SE, or the return on equity
NI / Sales, or the profit margin
EBIT / Sales, or the operating margin
EBIT / Interest, or the times interest earned ratio
TA / SE or the leverage ratio

business finance

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Answer 1

Answer #1

EBIT/Interest or the times interest earned ratio represents solvency ratio.

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