In my own words three sentences A business's profitability (as measured by ROE) is a function of these factors: (1) expense control, which is measured by total margin; (2) asset utilization, which is measured by total asset turnover; and (3) use of debt, which is measured by the equity multiplier. By analyzing the Dupont equation, managers can determine how each factor contributes to a business's profitability and hence can identify areas of strength and weakness