________ break(s)down the return-on-equity into three components.
A)The DuPont identity
B)Market value ratios
C)Profitability ratios
D)Asset management ratios

Question

Quizplus · Accepted Answer

The DuPont identity breaks down the return-on-equity into three components: net profit margin, asset turnover, and financial leverage. This helps to analyze the sources of a company's return-on-equity and identify areas for improvement. Market value ratios, profitability ratios, and asset management ratios do not provide such a breakdown of return-on-equity.

________ Break(s)down the Return-On-Equity into Three Components