Simplify the Expression

question 66

Multiple Choice

Simplify the expression.

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Definitions:

Operating Income

Income generated from the normal business operations of a company, excluding expenses such as interest and taxes.

DuPont Formula

A formula that breaks down Return on Equity (ROE) into three components: profit margin, asset turnover, and financial leverage, to analyze a company's financial performance.

Profit Margin

Profit margin is a financial metric showing the percentage of revenue that remains as profit after all operating expenses are deducted from sales.

Investment Turnover

A ratio that measures the efficiency of a company’s use of its assets in generating sales or revenue; the ratio of net sales to average total assets.