Corporate decision makers and analysts often use a particular technique, called a DuPont analysis, to better understand the factors that drive a company's financial performance, as reflected by its return on equity (ROE). By using the DuPont equation, which disaggregates the ROE into three components, analysts can see why a company's ROE may have changed for the better or worse, ond identify particular company strengths and weaknesses. The DuPont Equation A Dupont analysis is conducted using the Dupont equation, which helps to identify and analyze three important factors that drive a company's RoE. According to the equation, which of the following factors directly affect a company's ROE? Check all that apply. Total Assets / Total Common Equity Price per Share / Eamings per share Net Income / Sales Most investors and analysts in the finandal community pay particular attention to a company's RoE. The ROE can be caiculated simply by dividing a firms net incorne by the firm's shareholder's equity, and it can be subdivided into the key foctors that drive the RoE. Investors and analysts focus on these drivers to develop a clearer picture of what is happening within a company. An analyst gothered the following data and calculated the various terms of the DuPont equation for three companies: Reterring to these data, which of the foliowing conclusions will be true about the companies' ROEs? The main driver of company C's superior ROE, as compared to that of company A's and company Bs ROE, is its greoter use of debe financing. The main driver of company C's superior ROE, as compared to that of company As and company Es ROE, is its operational efficiency. The main driver of company A's inferior BOE, as compared to thot of company CS, ROE, is its higher total asset turnover ratio