Which two ratios are used in the DuPont system to create return on assets?
A) Return on assets and asset turnover
B) Profit margin and asset turnover
C) Return on total capital and the profit margin
D) Inventory turnover and return on capital assets

Question

Quizplus · Accepted Answer

The DuPont system calculates return on assets by using two ratios: profit margin and asset turnover. Profit margin is the percentage of sales that result in net income, and asset turnover is the amount of sales generated per dollar of assets. Multiplying these two ratios together gives the return on assets. Therefore, option B is the correct answer.

Which Two Ratios Are Used in the DuPont System to Create