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Dupont Method: The profit margin ratio is the only ratio that makes up ROE that can be negative (except in relatively rare cases). Describe how

Dupont Method:

The profit margin ratio is the only ratio that makes up ROE that can be negative (except in relatively rare cases).

Describe how the interpretation of the Asset Turnover Ratio (Sales / Total Asset) and the Financial Leverage Ratio (Total Asset / Shareholder's Equity) change based on whether the Profit Margin Ratio is positive or negative.

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