Which of the Statements Below Is TRUE?
A)DuPont Analysis Shows $\frac {\text {Sales }}{\text { Total Equity}}$

question 66

Multiple Choice

Which of the statements below is TRUE?

• A)DuPont analysis shows that ROE is Net Income
• Sales × \(\frac {\text {Sales }}{\text { Total Equity}}\) × \(\frac {\text {Total Equity }}{\text { Total Assets}}\) .
• B)DuPont analysis shows that ROE is \(\frac {\text {Net Income }}{\text { Sales}}\) × \(\frac{\text { Sales}} {\text {Net Income }}\) × \(\frac {\text { Total Assets}}{\text {Total Equity }}\) .
• C)DuPont analysis shows that ROE is \(\frac {\text {Net Income}}{\text {Total Assets }}\) × \(\frac {\text {Total Assets }}{\text {Net Income}}\) × \(\frac{\text {Total Assets }}{\text { Sales}}\) .
• D)DuPont analysis shows that ROE is \(\frac{\text {Net Income }}{\text {Sales }}\) × \(\frac{\text {Sales }}{\text { Total Assets}}\) × \(\frac{\text {Total Assets }}{\text { Total Equity}}\)

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Definitions:

Fair Hedge

A hedge that is accounted for at fair value, with changes in fair value recognized in earnings, to offset the exposure of an identified risk.

Foreign Currency Option

A financial contract allowing the owner to convert funds from one currency to another at a predetermined rate on a specific date, without being required to do so.

Put Option

A financial contract giving the holder the right to sell an asset at a specified price within a specific time.

Cash Flow Hedge

A cash flow hedge is a type of hedge that is used to manage exposure to variability in cash flows, particularly those related to forecasted transactions that could affect profit or loss.