This document discusses ratio analysis and DuPont analysis. Ratio analysis is used to analyze information in financial statements to judge efficiency, locate weaknesses, and compare plans. DuPont analysis examines return on equity (ROE) by analyzing profit margin, asset turnover, and financial leverage. It breaks down ROE to determine what is driving a company's performance and allows analysts to efficiently determine its strong and weak points. DuPont analysis helps investors thoroughly evaluate a company before investing and helps companies increase their ROE.

1. Ratio Analysis:
Du Pont Analysis
Name – Rohanjaiswal
Roll no: Bwu/Bba/16/042
Sub code: bba 401

2. A ratio analysis is a quantitative
analysis of information contained in a
company’s financial statements.

3. Imp of Ratio analysis
•Analyzing financial
statements
• Judging efficiency
•locating weakness
• Formulating plans
•Comparing plans

4. DuPont analysis examines the return
on equity (ROE) analyzing profit
margin, total asset turnover, and
financial leverage

5. ROE=
(Net Income/Revenues) x
(Revenues/Total Assets) x
( Total Assets / Shareholders'Equity)

6. •FOR EX:
XYZ BALANCE SHEET
TOTAL ASSETS – 25,000
SHAREHOLDERS EQUITY- 5,000
XYZ INCOME STATEMENT
REVENUE-10,000
NET INCOME- 2,000

7. ROE= ($2,000/$10,000) x
($10,000/$25,000) x
($25,000/$5,000) = 0.20 x 0.40 x 5 =
0.40
OR
40%

8. Annualreports of listed companies should contain
Dupont analysis because:
• It determines what is
driving a company's ROE
• It allows analysts to dissect a company
efficiently determine the strong and weak points of the
company and quickly know what areas of the business
to look at

9. CONCLUSION
From an investors point of view du point
analysis creates opportunities to evaluate a
company thoroughly before investing.
DU POINT analysis helps the company to increase its
ROE.

10. Thank you !
&
have a nice day !