Which of the following is NOT a component of the Du Pont identity?
A) Operating eﬃciency
B) Asset use eﬃciency
C) Financial leverage
D) Proﬁt per dollar of assets
E) Net working capital

Question

Quizplus · Accepted Answer

The Du Pont identity breaks down return on equity into three components: operating efficiency (profit margin), asset use efficiency (total asset turnover), and financial leverage (equity multiplier). Net working capital is not part of this identity.

Which of the Following Is NOT a Component of the Du