DuPont Equation/Chart

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Last updated 7:21 PM on 9/11/26
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16 Terms

1
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Operating cost =

COGS + Selling and Admin

2
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Net Sales =

Net Sales for the Year

3
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Operating profit (non-GAAP EBIT) =

Net Sales - Operating Costs

4
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Mgmt Working Capital =

AR + Inv - AP

5
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Longterm assets =

Total Assets - CA

6
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Total Operating Assets =

Mgmt Working Capital + Longterm Assets

7
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Capital Utilization (Asset Turns) =

Net Sales / Average Total Assets

8
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Profit Margin =

Operating Profit / Net Sales

9
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Pre-Tax ROA=

PM x Asset Turns

10
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After Tax ROA =

PT ROA (1- ETR)

11
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ETR =

Tax Expense / Earnings Before Tax

12
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DuPont Economic Profitability =

AT ROA - Cost of Capital

13
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NOPAT (net operating profit after tax) =

Operating Profit (1- ETR)

14
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Capital Charge =

Total Operating Assets x WACC

15
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EVA =

NOPAT - Capital Charge

16
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What is the order to solve for DuPont Economic Profitability?

Operating Cost
Net Sales
Operating Profit
Mgmt Working Capital
LT Assets
Total Operating Assets
Profit Margin
Capital Utilization
PT ROA
ETR
AT ROA
= DuPont Economic Profitability