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Under the DuPont system, the return on assets is equal to Select one: a. the product...

Under the DuPont system, the return on assets is equal to

Select one: a. the product of the gross profit margin and inventory turnover b. the sum of the debt-equity ratio and the return on sales c. the product of the return on sales and total asset turnover d. the product of the return on sales, total asset turnover, and equity multiplier e. none of the above

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Answer #1

Return on Assets =

(Net income / sales) * (Sales / Total Assets) * (Total Assets / Total Stockholder's equity)

So, Return on Assets is the product of the Return on sales, Total assets turnover and Equity multiplier

Option 'D' is correct

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