Question
So given your knowledge of the component ratios used in the DuPont equation, which of the following strategies should improve the companys ROE? Check all
So given your knowledge of the component ratios used in the DuPont equation, which of the following strategies should improve the companys ROE? Check all that apply.
a) Increase the firms bottom-line profitability for the same volume of sales, which will increase the companys net profit margin.
b) Decrease the amount of debt financing used by the company, which will decrease the total asset turnover ratio.
c) Decrease the companys use of debt capital because it will decrease the equity multiplier.
d) Increase the efficiency of its assets so that it generates more sales with each dollar of asset investment and increases the companys total asset turnover.
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