Why is the DuPont identity a valuable tool for analyzing the performance of a firm? Discuss the

Question:

Why is the a valuable tool for analyzing the performance of a firm? Discuss the types of information it reveals compared to ROE considered by itself.

DuPont Identity
The DuPont identity is an expression that shows a company's return on equity (ROE) can be represented as a product of three other ratios: the profit margin, the total asset turnover, and the equity multiplier. The formula for the DuPont identity...