Start typing, then use the up and down arrows to select an option from the list. # Financial Accounting

Learn the toughest concepts covered in your Financial Accounting class with step-by-step video tutorials and practice problems.

14. Financial Statement Analysis

# Ratios: DuPont Model for Return on Equity (ROE)

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Ratios: DuPont Model for Return on Equity (ROE) 9m
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Problem

XYZ Company had a profit margin of 8.8%, total asset turnover of 0.77, and an equity multiplier of 1.8. What is XYZ’s Return on Equity using the DuPont Model?

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Problem

A company had a profit margin of 6.1%. The company’s net sales were \$3,600,000 and Cost of Goods Sold was \$600,000. If total assets were \$3,450,000 at the beginning of the year and \$4,210,000 at the end of the year, and total equity was \$2,500,000 at the beginning of the year and \$3,100,000 at the end of the year, what is the company’s return on equity using the DuPont model?

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Problem

A company with net sales of \$820,000 and net income of \$210,000, average total assets of \$1,400,000 and average common equity of \$940,000 is using the DuPont Model for financial analysis. What is the company’s ROE? 