The Three Parts of the Du Pont Identity Can Be

question 74

Multiple Choice

The three parts of the Du Pont identity can be generally described as: I. operating efficiency,asset use efficiency and firm profitability.
II) financial leverage,operating efficiency and asset use efficiency.
III) the equity multiplier,the profit margin and the total asset turnover.
IV) the debt-equity ratio,the capital intensity ratio and the profit margin.

• A) I and II only
• B) II and III only
• C) I and IV only
• D) I and III only
• E) III and IV only

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Definitions:

Production

The process that transforms scarce resources into useful goods and services.

Inputs

Resources used in the production process, including labor, capital, and materials.

Outputs

Goods and services of value to households.

Explicit Costs

Payments made directly to external parties as part of business operations, including salaries, rental fees, and the cost of goods.