An equation in which total assets are multiplied to profit margin is classified as _________?
Correct answer: A. du DuPont equation
- A. du DuPont equation
- B. turnover equation
- C. preference equation
- D. common equation
Explanation
The DuPont equation decomposes return measures by combining profit margin with asset turnover, linking profitability and asset use. The other listed terms are not standard classifications for this relationship.
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Business finance explains how organisations plan, obtain and use money while balancing risk, return and liquidity. Topics include financial statements, time value of money, budgeting, working capital, capital structure, sources of finance, investment appraisal and cost of capital. Capital budgeting evaluates long-term projects, whereas working capital manages day-to-day operations.
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