Using DuPont analysis,what are the components of return on stockholders' equity?

Question

Quizplus · Accepted Answer

DuPont analysis breaks down the components of return on stockholders' equity into three components: Net profit margin ratio, asset turnover ratio, and leverage ratio. The net profit margin ratio measures how much profit a company generates from each dollar in sales. The asset turnover ratio measures how efficiently a company uses its assets to generate sales. The leverage ratio measures how much debt a company has in relation to its equity. Together, these ratios provide a more comprehensive picture of a company's return on stockholders' equity. Therefore, the best choice is D.

Using DuPont Analysis,what Are the Components of Return on Stockholders