Asked by Aishah Khalea on May 05, 2024
Verified
The ratio of sales to invested assets, which is also a factor in the DuPont formula for determining the return on investment, is called
A) profit margin
B) indirect margin
C) investment turnover
D) cost ratio
DuPont Formula
A method of performance measurement that breaks down return on equity into three component parts.
Investment Turnover
A measure of a company's efficiency in using its invested capital to generate revenues, often calculated as sales divided by the average invested capital.
Invested Assets
Assets that have been contributed or used by investors in the hope of generating future returns, often through interest, dividends, or appreciation in value.
- Understand the components and calculations involved in the DuPont formula for ROI.
Verified Answer
Learning Objectives
- Understand the components and calculations involved in the DuPont formula for ROI.
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