Asked by Abena Opoku on Jun 03, 2024

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Which of the following ratios is not part of the DuPont model?

A) Total asset turnover.
B) Debt-to-equity.
C) Net profit margin.
D) Return on equity.

DuPont Model

A financial analysis framework that breaks down return on equity into three components: profit margin, asset turnover, and financial leverage.

Debt-To-Equity

A financial ratio indicating the relative proportion of shareholders' equity and debt used to finance a company’s assets, illustrating financial leverage.

  • Understand the principles of the DuPont model in analyzing Return on Equity through its constituent ratios.
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KR
krista roblesJun 07, 2024
Final Answer :
B
Explanation :
All of the other ratios (total asset turnover, net profit margin, and return on equity) are part of the DuPont model, which is used to analyze a company's return on equity by looking at its profitability, efficiency, and financial leverage. Debt-to-equity, while an important financial ratio, is not included in the DuPont model.