Which of the following satisfies the DuPont method of profitability analysis?
A) Income / Investment = Income / Total costs + Revenues / Equity
B) Income / Investment = Income / Revenues + Revenues / Investment
C) Income / Investment = Income / Revenues × Revenues / Investment
D) Income / Investment = Income / Total costs × Revenues / Equity

Question

Quizplus · Accepted Answer

The DuPont method breaks down Return on Investment (ROI) into two components: Profit Margin (Income/Revenues) and Asset Turnover (Revenues/Investment), which when multiplied together give ROI.

Which of the Following Satisfies the DuPont Method of Profitability