What advantage does the DuPont model offer compared to the standard ROI calculation?
A)It is simpler.
B)It is more accurate.
C)It helps identify the actions required to improve the ROI.
D)None of these ans choices are correct.

Question

Quizplus · Accepted Answer

The DuPont model offers an advantage over the standard ROI calculation because it helps identify the actions required to improve the ROI. The model breaks down the components of ROI into several key performance ratios, such as asset turnover, profit margin, and financial leverage, allowing managers to pinpoint exactly where improvements can be made. This enables them to make more informed decisions and take targeted actions to maximize profitability.

What Advantage Does the DuPont Model Offer Compared to the Standard