DuPont Identity expresses the ROE in terms of the firm's ________.
A) profitability, asset efficiency, and leverage
B) current assets, current liabilities, long-term debts
C) profitability, interest expense, and net income
D) total assets, total liabilities, and total equity

Question

Quizplus · Accepted Answer

The DuPont Identity breaks down the ROE (return on equity) into three components: profitability, asset efficiency, and leverage. This allows investors to analyze how the company's income, asset utilization, and financial leverage impact their return on equity.

DuPont Identity Expresses the ROE in Terms of the Firm's