CFA Practice Question

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CFA Practice Question

Which of the following is NOT incorporated into calculation of the DuPont identity?
A. Return on assets
B. Equity multiplier
C. Receivables turnover
Explanation: The third factor is total asset turnover.

User Contributed Comments 5

User Comment
azramirza whats equity multiplier???
showmethemoney leverage ratio
alles DuPont can be return on assets and equity multiplier. But for the third one to be asset turnover (as the explanation says), the first one needs to be return margin (NI/Sales).
cfastudypl Equity multiplier is the same as financial leverage ratio of total assets/shareholders' equity. Forget about the word 'multiplier' which makes it seems like one big economic or financial term.
sumeetb @alles It can be = Net Profit Margin * ATR * FL = RoA*FL
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