The dupont analysis is a framework for analyzing fundamental performance popularized by the dupont corporation. The use of dupont analysis by market participants mark t. The 3part version of the dupont analysis shows you that roe ros x asset turnover x leverage. In other words, this model breaks down the return on equity ratio to explain how companies can increase their return for investors.
Decomposition of starbuckss return on equity ratio roe, return on assets ratio roa, and net profit margin ratio as the product of other financial ratios. Dupont mode return on equity net profit margin asset turnover ratio equity multiplier, dupont model is a tool to start off with financial statement analysis because it is based on return on equity. The five basic dupont analysis can be elaborated depending on the analytical depth required. Dupont analysis is an extended examination of return on equity roe of a company which analyses net profit margin, asset dupont analysis was developed by the dupont corporation in the year 1920. Dupont analysis is a model widely used in financial ratio analysis to designate the ability of a company to increase its return on equity ratio roe. The first two elements together, ros multiplied by asset turnover, form roa, return on assets. Dupont analysis is an equity evaluation approach that uses financial and leverage ratios that expand the profitability ratio of return on equity roe into a. Pros and cons of using dupont analysis investopedia. A study of financial performance using dupont analysis in. The dupont analysis also called the dupont model is a financial ratio based on the return on equity ratio that is used to analyze a companys ability to increase its return on equity.
1019 1570 522 105 876 26 1218 364 326 593 1499 1121 1004 449 15 299 860 929 1596 483 16 271 453 358 1043 710 963 484 1507 181 571 152 989 993 1313 140 1254 150 433 881