The ________ method of profitability analysis recognizes the two basic ingredients in profit-making: increasing income per dollar of revenues and using assets to generate more revenues.
A) Balanced Scorecard
B) Residual-Income
C) DuPont
D) Economic Value Added

Question

Quizplus · Accepted Answer

The DuPont method of profitability analysis considers both increasing income per dollar of revenues (through analyzing profit margins) and using assets to generate more revenues (through analyzing asset turnover). This method breaks down return on equity into these two components and is used to evaluate a company's overall efficiency in generating profits.

The ________ Method of Profitability Analysis Recognizes the Two Basic