Financial & Managerial Accounting
Financial & Managerial Accounting
17th Edition
ISBN: 9780078025778
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
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Chapter 25, Problem 1STQ
To determine

Find the component which is not part of the components of the DuPont system for measuring and evaluating business performance.

Expert Solution & Answer
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Answer to Problem 1STQ

b. Residual income

e. Number of patents

Explanation of Solution

DuPont system for performance measurement: it is a method to evaluate the company performance by considering both the earnings per sales dollar and the investment used to earn those dollars.

Return on investment=Return on sales×Capital turnover

Following are the components of the DuPont system for performance measurement:

  • Return on sales
  • Return on investment
  • Capital turnover

The above explanation is not matching with the options (b) and (e). Hence, options (b) residual income and (e) number of patents are the suitable answers.

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Chapter 25 Solutions

Financial & Managerial Accounting

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