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break(s) down the return-on-equity into three components. Asset management ratios Profitability ratios Market value ratios Th
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Answer #1

Answer- The Correct answer is D) The Dupont Identity.

The Dupont analysis Breaks down the Return on Equity into Three components namely Profit margin, Asset Turnover and Financial Leverage.

Formula

ROE (Dupont analysis) = Net Profit/ Sales x Sales/ Assets x Assets/ Equity

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