DuPont equation: Andrade Corp has debt of $2,834,950, total assets of $5,178,235, sales of $8,234,121, and net income of $812,355. What is the firm's return on equity?

Question

Quizplus · Accepted Answer

Return on equity (ROE) can be calculated using the DuPont equation as follows:
ROE = Net Income/Sales x Sales/Total Assets x Total Assets/Total Equity
ROE = Net Income/Total Equity

Therefore, ROE = $812,355/$2,343,285 = 0.347 or 34.7%. 
Therefore, the correct choice is B.

DuPont Equation: Andrade Corp Has Debt of $2,834,950, Total Assets