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DUPONTANALYSIS

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INTRODUCTIONINVENTED IN THE YEAR-1912

Also known as:

DUPONT EQUATION

DUPONT METHOD

DUPONT MODEL

DUPONT IDENTITY

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DUPONT ANALYSISlooks into 3 main

components

PROFIT MARGIN

TOTAL ASSET TURNOERFINANCIAL LEERAGE

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FORMULA

ROE!

PROFIT MARGIN"TOTAL

ASSETTURNOER"FINANCIAL

LEERAGE

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PROFIT MARGIN=

NET INCOME/NET SALES

TATO=

NET SALES/AVG TOTAL ASSETS

FINANCIAL LEVERAGE=TOTAL ASSETS/TOTAL EQUITY

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E#ample o$ 3 $acto% anal&sisCOMPANY A COMPANY '

NET PROFITMARGIN 1! 1!

A""ET

TURNOVER

1 1#$

FINAN%IAL

LEVERAGE

1#$ 1

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DUPONT E(UATION CANFURT)ER 'E E*TENDED AS+

ROE!

E'IT Ma%,in"Inte%est '-%.en"Ta# '-%.en"Asset T/O"Financial Le0e%a,e

ROE!

E'IT/sales"E'T/E'IT"Net Income/E'T"Sales/Total Assets"

Total Assets/Total E1-it&

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THAN&YOU