General Studies · Financial Analysis
As per the Du Pont equation for Return on Equity (ROE), other things remaining constant, which of the following statements is false?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1An increase in the average asset turnover will increase the ROE.
- 2A decrease in return on assets will decrease the ROE.
- 3An increase in the net profit margin will increase the ROE.
- 4A decrease in the debt-to-asset ratio will increase the ROE.✓
Correct answer
A decrease in the debt-to-asset ratio will increase the ROE.
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