Question
In: Finance
Your friend says that Company A is doing a great job for shareholders. He says that...
Your friend says that Company A is doing a great job for shareholders. He says that their ROA is high. You point out that shareholders tend to like debt and the Company A has low debt. Furthermore, ROA is biased towards companies with low debt. You suggest that ____________ is a better measure of the job management is doing for shareholders.
Solutions
Expert Solution
DuPont Analysis is a better measure of the job management.
DuPont Analysis = Net Income/ Sales * Sales/ Total Assets * Total Assets/ Average Shareholder Equity
jeff jeffy answered 2 years agoRelated Solutions
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