The DuPont formula involves which combination of financial elements in its computation?

Net profit margin, total asset turnover, and equity multiplier.
Total asset turnover and sales turnover profitability.
Profit margin, sales turnover, and asset-use efficiency.
Total asset turnover, sales turnover, and equity multiplier.Show Result

Correct - Your answer is correct.

Wrong - Your answer is wrong.

Detailed Answer

Answer (A) is correct. The DuPont model begins with the standard equation for return on equity (ROE) and breaks it down into three different efficiency components. ROE = Net profit margin × Asset turnover × Equity multiplier