The DuPont system allows the firm to break its return on equity into a profit-on-sales component, an efficiency-of-asset-use component, and a use-of-leverage component.

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The DuPont system is a method to decompose return on equity (ROE) into its different components, including profit margin (profit/sales), asset turnover (sales/assets), and financial leverage (assets/equity).

The DuPont System Allows the Firm to Break Its Return