Information AboutDupont Model |
| CATEGORIES ABOUT DUPONT MODEL | |
| business economics | |
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Formulas Return on equity = Operating profits after taxes/Equity Leverage Multiplier = Assets/Equity Return on Assets = Operating profits after taxes/Assets Asset utilization = Revenue/Assets Net Margin (After tax) = Operating profit after tax/Revenues Definitions ROE – Tells how much has been earned on the book value of ordinary shareholders’investment in the ADI ROA – Is operating profit after tax divided by the total assets, and should reflect managements’ ability to use financial and real resources to generate revenue. Leverage Multiplier – Is calculated by diving assets by equity. Asset Utilization – Reflects how effectively management has invested in earning assets by calculating the overall yields earned on the assets. Net Margin –Represents what is left out of one dollar’s revenue after all costs have been deducted. |
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