The method of calculating return on assets which highlights the importance of sales, profit margin, and asset turnover is known as:
A) the Gordon model
B) cost-volume profit analysis
C) DuPont analysis
D) break-even analysis

Question

Quizplus · Accepted Answer

DuPont analysis breaks down return on assets into three components: profit margin, asset turnover, and leverage. It highlights the importance of each component in generating return on assets, and can help a company identify areas for improvement in its operations.

The Method of Calculating Return on Assets Which Highlights the Importance