Following the DuPont Analysis Model, the Higher the Leverage Ratio

question 183

Multiple Choice

Following the DuPont analysis model, the higher the leverage ratio, the higher the:

• A)net profit margin ratio.
• B)return on assets.
• C)return on sales.
• D)return on stockholders' equity.

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Definitions:

Business Tort

A civil wrong, apart from breach of contract, committed by or against an organization during the course of conducting business, leading to legal liability.

Contractual Relations

The legal obligations and rights established between parties who have entered into a contract.

Disparagement

A form of defamation that specifically refers to false statements made about a business's products or services, which cause financial harm.

Fraudulent Misrepresentation

The intentional act of making a false statement about an important fact to induce another person into entering a contract or transaction.