DuPont ROE Decomposition

If financial leverage rises while margin and turnover are unchanged, what happens to $ROE$, and why is the quality lower?

$ROE$ rises, but from added financial risk rather than better operations.

If asset turnover rises while margin and leverage are unchanged, what does that imply about $ROE$ and its source?

$ROE$ rises from improved operating efficiency.

If net profit margin rises while asset turnover and leverage stay constant, what happens to $ROE$, and what is the quality of that change?

$ROE$ rises; higher-quality improvement from better profitability.

What is the 3-factor DuPont formula for $ROE$?

$ROE=$ net profit margin $\times$ asset turnover $\times$ financial leverage.