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Equity multiplier
The Impact of Financial Leverage: Equity Multiplier in DuPont Analysis
November 13, 2023
What role does the equity multiplier play in DuPont Analysis?
In DuPont Analysis, the equity multiplier plays a crucial role in assessing financial leverage. It measures the extent to which a company relies on debt to finance its assets. A higher equity multiplier indicates higher financial leverage, potentially magnifying returns but also increasing risk. Understanding the equity multiplier in DuPont Analysis provides insights into a company's capital structure and risk profile.
Tags : Equity Multiplier , DuPont Analysis , Financial Structure