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 answer choices are correct.

Question

Quizplus · Accepted Answer

The DuPont model offers an advantage over the standard ROI calculation because it not only provides a more comprehensive analysis of financial performance but also helps identify which specific actions can be taken to improve the ROI. This is because the DuPont model breaks down ROI into its components of profitability, asset utilization, and leverage, allowing managers to see where improvements can be made in each area to enhance the overall ROI.

What Advantage Does the DuPont Model Offer Compared to the Standard