Which of the following is the expansion of the DuPont formula for return on stockholders' equity?

Question

Which of the following is the expansion of the DuPont formula for return on stockholders' equity? ​

Quizplus · Accepted Answer

The DuPont formula for return on stockholders' equity is calculated as follows: Return on Equity = Net Income/Stockholders' Equity = (Net Income/Sales) × (Sales/Total Assets) × (Total Assets/Stockholders' Equity) = Profit margin × Asset turnover × Financial leverage. Option A is the only choice that correctly represents the three components of the DuPont formula.

Which of the Following Is the Expansion of the DuPont