What is ROE, ROA, and The DuPont Formula?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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What is ROE, ROA, and The DuPont Formula?
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Ratio analysis is a part of management accounting in which different types of ratios are determined to evaluate the performance of the firm. The ratios are also used to compare the firm's performance with other peer firms or industry's average.
Ratio analysis is also used by the external stakeholders of a firm like investors, creditors, banks, government, etc. Ratios are not only helpful in determining the profitability of the firm but it is also used in determining the working style of the firm.
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