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16 March, 04:30

The DuPont equation shows the relationships among asset management, debt management, and ratios. Management can use the DuPont equation to analyze ways of improving the firm's performance. Its equation is:

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  1. 16 March, 04:50
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    Return on equity (ROE) = profit margin * asset turnover * financial leverage

    Step-by-step explanation:

    Return on equity (ROE) = profit margin * asset turnover * financial leverage

    Which can be written as:

    ROE = (net income: sales) * (sales : total assets) * (total asset : average shareholder equity)
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