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Nov 16, 2022 · Preprint PDF Available. A STUDY OF FINANCIAL PERFORMANCE USING DUPONT ANALYSIS IN A SUPPLY CHAIN. November 2022. Authors: Aikor Shirgba Timothy. Federal University of Technology Owerri....
In particular, the well-known method of DuPont analysis decomposes the most common measure of financial performance, Return on Equity (ROE), into three very relevant standard financial ratios: turnover, margin and leverage, thus making for a simple financial performance assessment tool.
- Elisabet Saus–Sala, Àngels Farreras–Noguer, Núria Arimany–Serrat, Germà Coenders
- 2021
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This module explains ROE and focuses on disaggregation of ROE, also called DuPont analysis (after DuPont management that first successfully applied it). ROE disaggregation focuses on the drivers of ROE. This module also introduces liquidity and solvency analysis—another important aspect of company suc-cess.
Summary. This chapter discusses how the DuPont system enables one to examine a firm's financial statements to determine what, if anything, is causing its return on investment or return on equity to fall short of expectations. This is accomplished by breaking these returns into three component parts: profit margin, asset turnover, and return on ...
The DuPont analysis is basically based on two tier i.e. profit margin and assets turnover. For DuPont Analysis, the data requirements were collected from secondary sources, like financial statements of the company. The study covers only five years 2014-15 to 2018-19.
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A detailed financial analysis of all three companies using the DuPont system shows that investing in Tiger Brands would generate a higher return to shareholders than Pioneer Foods or RCI. Keywords: profitability, ratios, financial sustainability, financial analysis, investments, DuPont analysis, strategic decisions.
The du pont system analysis is used to measure the company's financial performance in more detail by showing how the net profit margin, total asset turnover and equity multiplier to determine the rate of return on equity.
