To think critically about : The reason for considering DuPont identity as a precious tool for performance evaluation of the company and the kind of information it discloses, compared to return on equity . Introduction: The return on equity is a profitability measurement that computes how many dollars of profit a firm could generate with every dollar of shareholders equity. It is the net income returned as a part of the equity of the shareholders. The DuPont identity is a ratio system that is utilized to evaluate the financial performance of a firm. Such ratio systems include return on asset, return on equity, total asset turnover, profit margin, and equity multiplier.

Question

Want to see the full answer?

Answer 1

Question

Chapter 3, Problem 7CRCT

Summary Introduction

To think critically about: The reason for considering DuPont identity as a precious tool for performance evaluation of the company and the kind of information it discloses, compared to return on equity.

Introduction:

The return on equity is a profitability measurement that computes how many dollars of profit a firm could generate with every dollar of shareholders equity. It is the net income returned as a part of the equity of the shareholders.

The DuPont identity is a ratio system that is utilized to evaluate the financial performance of a firm. Such ratio systems include return on asset, return on equity, total asset turnover, profit margin, and equity multiplier.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

In 1895, the first U.S. Putting Green Championship was held. The winner's prize money was $170. In 2022, the winner's check was $3,950,000. a. What was the percentage increase per year in the winner's check over this period? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. b. If the winner's prize increases at the same rate, what will it be in 2053? Note: Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16. a. Increase per year b. Winners prize in 2053 %

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 73.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 73.0 when he fully retires, he will begin to make annual withdrawals of $183,008.00 from his retirement account until he turns 94.00. After this final withdrawal, he wants $1.52 million remaining in his account. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 6.00% interest rate. Round to 2 decimal places.

Derek plans to retire on his 65th birthday. However, he plans to work part-time until he turns 71.00. During these years of part-time work, he will neither make deposits to nor take withdrawals from his retirement account. Exactly one year after the day he turns 71.0 when he fully retires, he will begin to make annual withdrawals of $177,333.00 from his retirement account until he turns 94.00. He he will make contributions to his retirement account from his 26th birthday to his 65th birthday. To reach his goal, what must the contributions be? Assume a 9.00% interest rate. Submit Answer format: Currency: Round to: 2 decimal places.