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DuPont ROE analysis takes a simple ratio (Net Income / Equity) and expands it out...

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DuPont ROE analysis takes a simple ratio (Net Income / Equity) and expands it out into several ratios. Why do we do this for ROE? What do we accomplish? Please select two true answers.

a) We do this with ROE because ROE is perhaps the single most important ratio that measures effectiveness on equity capital.

b) We do this with ROE because ROE is perhaps the single most important ratio that measures effectiveness of profitability.

c) The DuPont ROE method allows us to see the components that drive ROE.

d) The DuPont ROE method allows us to see future trends in ROE.

10 DuPont ROE analysis takes a simple ratio (Net Income / Equity) and expands it out into several ratios. Why do we do this for ROE? What do we accomplish? Please select two true answers. a) We do this with ROE because ROE is perhaps the b) We do this with ROE because ROE is perhaps the single most important ratio that measures single most important ratio that measures effectiveness on equity capital. effectiveness of profitability. c) The DuPont ROE method allows us to see the d) The DuPont ROE method allows us to see future components that drive ROE. trends in ROE

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