The DuPont Identity Can Be Totally Defined by Which One

question 15

Multiple Choice

The DuPont identity can be totally defined by which one of the following?

• A)Return on equity, total asset turnover, and equity multiplier
• B)Equity multiplier and return on assets
• C)Profit margin and return on equity
• D)Total asset turnover, profit margin, and debt-equity ratio
• E)Equity multiplier, return on assets, and profit margin

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Definitions:

Contingent Liabilities

Possible obligations that may arise in the future due to past events, depending on the occurrence of certain uncertain events.

Unearned Revenues

Income received by a company for goods or services yet to be delivered or performed.

Liability Uncertainty

Liability uncertainty involves not knowing the exact amount or timing of future outflows due to existing obligations.

Sales Taxes Payable

Current liabilities on a company’s balance sheet, representing taxes collected from customers on behalf of governmental authorities which are yet to be remitted.