A type of analysis that examines a company's Return on Equity (ROE) by breaking it into three main components: profit margin, asset turnover and leverage factor. By breaking the ROE into distinct parts, investors can examine how effectively a company is using equity, since poorly performing components will drag down the overall figure. To calculate a firm's ROE through Du Pont analysis, multiply the profit margin (net income divided by sales), asset turnover (sales divided by assets) and leverage factor (total assets divided by shareholders' equity) together. The higher the result, the higher the return on equity.
Related information about Du Pont analysis:
- DuPont analysis - Wikipedia, the free encyclopedia
Du Pont analysis relies upon the accounting identity, that is, a statement (formula) ... Du Pont analysis enables the third party (relying primarily on the financial ...
- What is Du Pont analysis? definition and meaning
Definition of Du Pont analysis: A type of analysis that examines a company's Return on Equity (ROE) by breaking it into three main components: profit margin, ...
- TheManageMentor - Finance - DU Pont Analysis
DU Pont Analysis. The Du Pont Company of the US pioneered a system of financial analysis, which has received widespread recognition and acceptance.
- A Du Pont Analysis of the 20 Most Profitable Companies in ... - ipedr
using Du Pont analysis we came to the results that the ranking is not preserved when ... Du Pont analysis, a common form of financial statement analysis ...
- The DuPont System Applied to Sears, Roebuck & Co. - it-educ.jmu.edu
equity total assets net profit sales. ⎛. ⎞. │. │. │. │. ⎝. ⎠ total assets. ⎛. ⎞. │. │. ⎝. ⎠ equity. ⎛. ⎞. │. │. │. │. ⎝. ⎠. Du Pont Analysis example (P. Peterson) ...
- really modified du pont analysis - Small Business Advancement ...
REALLY MODIFIED DU PONT ANALYSIS: FIVE WAYS TO IMPROVE RETURN ON EQUITY. Thomas J. Liesz. Mesa State College. Abstract. While the actual ...
- Du Pont identity Help for Ratio analysis, Finance, Homework Help ...
The basic theory behind Du Pont analysis states that forms of return on equity using net book value discourage investment in new, potentially risky ventures ...
- What is du-pont analysis
Du Pont Analysis. A method of performance measurement that was started by the DuPont Corporation in the 1920s, and has been used by them ever since.