Analysts Should Never Rely on Their Hunches in Analytics

question 2

True/False

Analysts should never rely on their hunches in analytics.

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Definitions:

DuPont Formula

The DuPont Formula is a financial analysis method that decomposes a company's return on equity into three parts: profitability, asset efficiency, and financial leverage, to understand driving factors behind performance.

Profit Margin

A financial performance ratio that calculates the percentage of revenue that exceeds the costs of goods sold, representing the portion of sales that turns into profit.

Investment Turnover

A ratio indicating how efficiently a company generates sales revenue from its investment in assets.

Return on Investment

A measurement of the gain or loss generated on an investment relative to the amount of money invested.