Which Two Ratios Are Used in the DuPont System to Create

question 68

Multiple Choice

Which two ratios are used in the DuPont system to create return on assets?

• A) Return on assets and asset turnover
• B) Profit margin and asset turnover
• C) Return on total capital and the profit margin
• D) Inventory turnover and return on capital assets

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Definitions:

Expected Return

The anticipated average return from an investment based on its probable profits.

Recession

A period of temporary economic decline during which trade and industrial activity are reduced, generally identified by a fall in GDP in two successive quarters.

Portfolio

A group of various financial instruments such as stocks, bonds, commodities, and cash or cash-like assets, including mutual funds and exchange-traded funds.

Portfolio Diversification

An investment strategy that involves spreading investments across different financial assets to reduce risk.