The DuPont Method Return on Assets Uses Two Component Ratios

question 35

Multiple Choice

The DuPont method return on assets uses two component ratios.What are they?

• A) inventory turnover * gross profit margin
• B) times interest earned * debt ratio
• C) return on equity * dividend payout
• D) net profit margin * total asset turnover
• E) return on investment * total investment turnover

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Definitions:

Machinery Use

Refers to the employment of machines to perform work or tasks, often used to increase efficiency, productivity, and precision in industries and agriculture.

Labor Organization

A group, often in the form of a union, that represents the collective interests of workers in negotiations with employers regarding wages, working conditions, and rights.

Mechanization

The process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.

Cotton Mills

Factories equipped for the processing and manufacturing of cotton into yarn or fabric, pivotal to the Industrial Revolution.