DuPont Analysis Breaks Down Return on Equity into Major Areas

question 9

Multiple Choice

DuPont Analysis breaks down return on equity into major areas that can be used to identify a firm's strengths or weaknesses with respect to

• A) Profitability
• B) Leverage
• C) Liquidity
• D) Efficiency
• E) All of the above are broken out in the basic DuPont equation.

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Definitions:

Merit Pay Raises

Increases in salary given to employees based on their performance, often determined through evaluations and assessments.

Performance Goals

Specific, measurable objectives set to evaluate the effectiveness of employees or company processes.

Incentive Plans

Programs designed by employers to motivate and reward employees for exceeding work performance goals.

Performance Standards

The established expectations, metrics, or benchmarks used to measure and assess an individual's or organization’s performance in specific areas.