The DuPont equation shows the combined impact of a firm's control on its expenses along with its efficient use of assets and debt on its return on equity.

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The statement accurately describes the DuPont equation, which breaks down a company's return on equity into three components: profitability (measured by net profit margin), asset efficiency (measured by total asset turnover), and leverage (measured by the equity multiplier). By analyzing each component, the DuPont equation allows management to identify areas where the company can improve its financial performance.

The DuPont Equation Shows the Combined Impact of a Firm's