What advantage does the DuPont model offer compared to the standard ROI calculation?
A)It classifies costs based on function.
B)It is more accurate.
C)It helps identify the actions required to improve the ROI.
D)It separates costs by behavior.

Question

Quizplus · Accepted Answer

The DuPont model breaks down Return on Investment (ROI) into components (profit margin, asset turnover, and financial leverage), which helps in identifying specific areas of strength and weakness. This detailed breakdown allows businesses to pinpoint specific actions needed to improve overall ROI.

What Advantage Does the DuPont Model Offer Compared to the Standard