Which One of the Following Statements Is NOT Correct

question 17

Multiple Choice

Which one of the following statements is NOT correct?

• A) The DuPont system is based on two equations that relate a firm's return on asset (ROA) and return on equity (ROE).
• B) The DuPont system is a set of related ratios that links the items of balance sheet and the income statement.
• C) Both management and shareholders can use this tool to understand the factors that drive a firm's return on equity (ROE).
• D) All of the above are correct.

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Definitions:

Net Income

The amount of money a corporation earns post all deductions for taxes and expenditures from its income.

Total Assets

The sum of all assets owned by a company, including cash, investments, equipment, and property, as recorded on the balance sheet.

Accounts Receivable

Receivables from clients to a corporation for goods delivered or services rendered, pending payment.

Cash

A company's most liquid asset, consisting of currency held and deposits in bank accounts, used for transactions or as reserve for future payments.