performance analysis with DuPont
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9 Terms
what are the 3 ways DuPont measures performance?
is the company making money
is the company using its resources efficiently
had the company borrows wisely?
what is another name for debt?
leverage
what is the DuPont framework?
The framework starts with the return on equity ratio, as a measure of company performance, and then the construct it into three parts related to 1. profitability
asset efficiency
financial leverage
what is the Dupont framework equation? memorize this
can just be simplified to net income/total equity, but remember the whole thing
what is profit margin “profitability” ratio?
net income/sales
what is the asset turnover “efficiency” ratio?
sales/total assets
what is the assets to equity “leverage” ratio?
total assets/total equity
which of the following ratios does the depot framework deconstruction?
Gross profit ratio
Sales ratio
Asset turnover ratio
Return on equity ratio
return on sales
return on equity ratio