Which of the following is NOT a component of the Du Pont identity?
A) Operating efficiency
B) Asset use efficiency
C) Financial leverage
D) Profit per dollar of assets
E) Net working capital

Question

Quizplus · Accepted Answer

The Du Pont identity is a framework for analyzing a company's return on equity (ROE) by breaking it down into three components: operating efficiency (measured by profit margin), asset use efficiency (measured by total asset turnover), and financial leverage (measured by the equity multiplier). Net working capital is not a component of the Du Pont identity; it is a measure of a company's liquidity.

Which of the Following Is NOT a Component of the Du