Which Two Ratios Are Used in the DuPont System to Create

question 129

Multiple Choice

Which two ratios are used in the DuPont system to create return on assets?

• A) Return on assets and asset turnover
• B) Profit margin and asset turnover
• C) Return on total capital and profit margin
• D) Inventory turnover and return on fixed assets

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Definitions:

Total Debt

The sum of all liabilities, both short and long term, that a company owes.

Cash In Hand

The amount of liquid money or physical currency that a company or individual has readily available.

Bills Receivable

Financial documents representing money owed to a business by its customers that is payable within a short period.

Inventories

Quantities of goods and materials that a business holds for the purpose of sale or production.