Correct Answer:
A. Net profit margin x total asset turnover x equity multiplier
It breaks ROE into profitability, efficiency and leverage.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
The DuPont identity expresses ROE as:
Related MCQs
The cost of installing a new machine in a factory is:
A.
Revenue expenditure
B.
A drawing
C.
Deferred revenue
D.
Capital expenditure
Correct answer is:
D. Capital expenditure
Do you agree with this answer?
Surrender of savings means that:
A.
Funds are spent quickly at year end
B.
Departments keep unspent money for the next year
C.
Unspent funds that will not be needed are returned to the government before the end of the fiscal year
D.
Savings are invested in bonds
Correct answer is:
C. Unspent funds that will not be needed are returned to the government before the end of the fiscal year
Do you agree with this answer?
Overhead is under-absorbed when:
A.
Actual overhead is less than absorbed overhead
B.
Actual overhead equals absorbed overhead
C.
Actual overhead is greater than absorbed overhead
D.
Budgeted overhead is zero
Correct answer is:
C. Actual overhead is greater than absorbed overhead
Do you agree with this answer?
A flexible budget is a budget that:
A.
Never changes
B.
Includes only fixed costs
C.
Is adjusted to the actual level of activity achieved
D.
Is prepared without forecasting
Correct answer is:
C. Is adjusted to the actual level of activity achieved
Do you agree with this answer?
Accounts receivable are Rs. 100,000 and annual credit sales are Rs. 730,000. Average collection period (365-day year) is:
A.
73 days
B.
50 days
C.
30 days
D.
7.3 days
Correct answer is:
B. 50 days
Do you agree with this answer?
Net income is Rs. 500,000, preference dividends are Rs. 50,000 and weighted average ordinary shares are 100,000. Earnings per share (EPS) is:
A.
Rs. 4.50
B.
Rs. 5.00
C.
Rs. 5.50
D.
Rs. 450
Correct answer is:
A. Rs. 4.50
Do you agree with this answer?
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