Question

QUESTION 20 The Du Pont identity can be best defined by which one of the following? A. Return on equity, total asset turnover, and equity multiplier B. Profit margin, debt-to-equity ratio, and return on equity Total asset turnover, profit margin, and debt equity ratio W.Equity multiplier, return on assets, and profit margin E. Profit margin and retum on assets

Answer 1

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Answer:

Du Pont equation is given by

Return on Equity = Net Profit Margin X Asset Turnover X Equity Multiplier Return on Equity = Net Profit Sales Sale Asse ts X -Y Assets Shareholder's Equity

Hence Option D