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Ratio Analysis:
Du Pont Analysis
Name – Rohanjaiswal
Roll no: Bwu/Bba/16/042
Sub code: bba 401
A ratio analysis is a quantitative
analysis of information contained in a
company’s financial statements.
Imp of Ratio analysis
•Analyzing financial
statements
• Judging efficiency
•locating weakness
• Formulating plans
•Comparing plans
DuPont analysis examines the return
on equity (ROE) analyzing profit
margin, total asset turnover, and
financial leverage
ROE=
(Net Income/Revenues) x
(Revenues/Total Assets) x
( Total Assets / Shareholders'Equity)
•FOR EX:
XYZ BALANCE SHEET
TOTAL ASSETS – 25,000
SHAREHOLDERS EQUITY- 5,000
XYZ INCOME STATEMENT
REVENUE-10,000
NET INCOME- 2,000
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%
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
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.
Thank you !
&
have a nice day !

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Ratio analysis

  • 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 !