Financial Statement Analysis – DuPont Breakdown

Question 1

What is the equation for the Asset Turnover Ratio?

A Net Income/Average Total Assets

B Net Sales/Average Total Assets

C Average Total Assets/Net Income

D Average Total Assets/Net Sales

Answer 1

B

Question 2

Which of the following formulae is NOT a measure of profitability?

A Return on Assets

B Asset Turnover

C Interest Coverage

D Return on Common Shareholders’ Equity

Answer 2

C

Question 3

Each of the following assets is included in the numerator of the Quick Ratio except:

A Cash

B Properties

C Short-term Investments

D Receivables

Answer 3

B

Question 4

DuPont Analysis focuses on which of the following ratios?

A Return on Assets

B Return on Common Shareholders’ Equity

C Current Ratio

D Financial Leverage

Answer 4

B

Question 5

Under the DuPont Analysis, Return on Equity is broken down into which of the following ratios?

A Debt-to-Asset Ratio

B Profit Margin

C Asset Turnover

D Financial Leverage

Answer 5

A