The Du Pont model measures ROI as it is affected by
A)contribution margin and asset turnover.
B)profit margin and asset turnover.
C)asset turnover.
D)profit margin.

Question

Quizplus · Accepted Answer

The Du Pont model measures ROI (return on investment) by breaking it down into two components: profit margin and asset turnover. Profit margin is the percentage of sales that results in net income, while asset turnover measures how efficiently a company uses its assets to generate revenue. Therefore, the Du Pont model considers both profitability (profit margin) and efficiency (asset turnover) in determining ROI.

The Du Pont Model Measures ROI as It Is Affected