How to use DuPont analysis for comprehensive financial analysis

Using DuPont analysis method to carry out comprehensive financial analysis is as follows:

1, DuPont analysis method is the core of the return on net assets, which is one of the most comprehensive financial analysis indicators.

2, net asset margin is the most important indicator affecting the return on net assets, and net asset margin depends on the net sales rate and asset turnover rate. Expand sales revenue, reduce costs and expenses is the fundamental way to improve corporate sales margins, while expanding sales, but also to improve the asset turnover rate of the necessary conditions and ways.

3, the equity multiplier indicates the degree of corporate debt, reflecting the company's use of financial leverage for business activities. High gearing ratio, equity multiplier is large, indicating that the company's high degree of indebtedness, leverage benefits, but also high risk.

Introduction to DuPont Analysis

DuPont Analysis is a comprehensive approach to analyzing a company's financial position using the relationship between several key financial ratios. Specifically, it is a classic method used to evaluate the profitability of a company and the level of return on shareholders' equity, and to evaluate the performance of an enterprise from a financial point of view.

The basic idea is to break down the return on net assets of an enterprise step by step into the product of several financial ratios, which helps to analyze and compare the operating performance of the enterprise in depth. Because this analysis method was first used by the U.S. DuPont, so the name DuPont analysis.