Definition: What is a DuPont Analysis?
Dupont analysis is also known as the DuPont model. It is the financial ratio which measures the ability of the company to increase its return on equity.
This ratio explains the return on equity that how company increase return for investors. DuPont analysis based on the Return on equity ratio and it has 3 main components of ROE ratio which given below.
- Profit Margin
- Total Asset Turnover
- Financial Leverage
Through these 3 components, the company can raise its ROE.
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