The DuPont Formula Is Useful to Diagnose Reasons for Poor

question 70

True/False

The DuPont formula is useful to diagnose reasons for poor performance by disaggregating the return on capital to identify the key "drivers of value"

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Definitions:

Operating Activities

Transactions that relate to the primary operations of a company, such as sales and service provision.

Indirect Method

A cash flow statement approach that adjusts net income for changes in non-cash working capital and other items to calculate operating cash flow.

Cash Flow Classifications

The categorization of cash flows into operating, investing, and financing activities for the purpose of financial reporting and analysis.

Free Cash Flow

The cash a company generates after accounting for cash outflows to support operations and maintain its capital assets.