How is leverage expressed in DuPont Ratio System? a) Total Debt / Equity b) Total Debt / Total Sources c) Equity / Total Assets d) Total Assets / Equity
How is leverage expressed in DuPont Ratio System? a) Total Debt / Equity b) Total Debt / Total Sources c) Equity / Total Assets d) Total Assets / Equity
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Question
How is leverage expressed in DuPont Ratio System?
a) Total Debt / Equity
b) Total Debt / Total Sources
c) Equity / Total Assets
d) Total Assets / Equity
Expert Solution
Step 1 introduction
Dupont ratio system is used to analysis the financial statements and assess its financial condition. This system merged the analysis of income statement and balance sheet by net profit margin, total assets turnover and financial leverage.
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