Table 3.2 Dana Dairy Products Key Ratios Income Statement

Multiple Choice

Table 3.2
Dana Dairy Products Key Ratios Income Statement
Dana Dairy Products
For the Year Ended December 31, 2013 Balance Sheet
Dana Dairy Products
December 31, 2013
-Using the modified DuPont formula allows the analyst to break Dana Dairy Products return on equity into 3 components: the net profit margin, the total asset turnover, and a measure of leverage (the financial leverage multiplier) . Which of the following mathematical expressions represents the modified DuPont formula relative to Dana Dairy Products' 2013 performance? (See Table 3.2)

A) 5.6(ROE) = 2.5(ROA) × 2.22(Financial leverage multiplier)
B) 5.6(ROE) = 3.3(ROA) × 1.70(Financial leverage multiplier)
C) 4.0(ROE) = 2.5(ROA) × 2.00(Financial leverage multiplier)
D) 2.5(ROE) = 5.6(ROA) × 2.22(Financial leverage multiplier)