Answer (A) is correct . The DuPont model treats the return on assets as the product of the profit margin and the asset turnover: If one company has a higher return on assets than another, it may have a higher profit margin, a higher asset turnover, or both.
Answer (B) is incorrect because A higher profit margin on sales or a higher asset-turnover ratio may explain a higher return on assets.
Answer (C) is incorrect because A higher profit margin on sales or a higher asset-turnover ratio may explain a higher return on assets.
Answer (D) is incorrect because A higher profit margin on sales or a higher asset-turnover ratio may explain a higher return on assets.
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