ABC Corp's 2019 ROE dropped fifty percent from 2018. If the reason was return on sales, what component of
the DuPont framework has decreased?

Respuesta :

Profitability exists the element of the DuPont framework has decreased.

What is Profitability?

A profit exists the distinction between the revenue that an economic entity has acquired from its outputs and the opportunity costs of its inputs. It equals total revenue minus total cost, including both explicit and implicit costs. Profitability exists as a measurement of an organization's profit compared to its expenses. Organizations that exist more efficiently will recognize more profit as a percentage of their expenses than a less-efficient organization, which must spend more additional to generate the identical profit.

ROS stands calculated by dividing operating profit by net sales. ROS exists only useful when corresponding companies in the same line of business and of roughly the same size. Return on sales (ROS) exists as a measurement of how efficiently a company turns sales into profits. ROS exists computed by dividing operating profit by net sales. ROS is only valid when comparing companies in the identical line of business and of roughly the same size.

Hence, Profitability exists the element of the DuPont framework has decreased.

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The complete question  is,

ABC Corp's 2019 ROE dropped fifty percent from 2018. If the reason was return on sales, what component of the DuPont framework has decreased?

Leverage

Cash Flow

Efficiency

Profitability