With regard to DuPont analysis,the leverage ratio measures:
A)the impact of equity financing on a company's profitability.
B)the impact of debt financing on a company's profitability.
C)the impact of leverage on a company's financial position.
D)the impact of equity financing on a company's financial position.

Question

Quizplus · Accepted Answer

The leverage ratio in DuPont analysis measures the impact of debt financing on a company's profitability. It is calculated as the ratio of total assets to total equity, with a higher ratio indicating greater reliance on debt financing. This measure is important because higher levels of debt generally increase a company's financial risk and can affect profitability.

With Regard to DuPont Analysis,the Leverage Ratio Measures