The net income is $100, sales are $200, total assets are $500, and total equity is $300. According to the DuPont method of financial ratio analysis, ROE is about 33.33%

Indicate whether the statement is true or false.

Answer: TRUE
Explanation: ROE = net income/sales × sales/total assets × total assets/total equity
ROE = ($100/$200) × ($200/$500) × ($500/$300) = 0.5 × 0.4 × 1.6667 = 0.33333, or about 33.33%.