The DuPont System Merges the Income Statement and Balance Sheet

question 137

Multiple Choice

The DuPont system merges the income statement and balance sheet into two summary measures of profitability

• A) net profit margin and return on total assets.
• B) net profit margin and return on equity.
• C) return on total assets and return on equity.
• D) net profit margin and price/earning ratio.

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Definitions:

Economies of Scale

The cost advantage achieved when production becomes efficient, leading to a decrease in the average costs per unit as output increases.

Technology Specialization

The focus of a company or industry on a specific technology niche, with the aim of achieving leadership and expertise in that area.

Market Segmentation

The process of dividing a market of potential customers into groups, or segments, based on different characteristics.

Bureaucratic Logistical Issues

Challenges in organizing, planning, and carrying out operations often caused by complex administrative procedures.