What are the limitations of DuPont analysis?

From the perspective of enterprise performance evaluation, DuPont analysis method only contains financial information, which can not fully reflect the strength of enterprises and has great limitations. In practical application, it should be noted that it must be analyzed in combination with other information of the enterprise. Mainly manifested in:

1. Paying too much attention to short-term financial results may encourage the short-term behavior of the company's management and ignore the long-term value creation of the company.

2. Financial indicators reflect the past business performance of enterprises and measure whether enterprises in the industrial age can meet the requirements. However, in the current information age, customers, suppliers, employees, technological innovation and other factors have more and more influence on the business performance of enterprises, and DuPont analysis is powerless in these aspects.

3. In the current market environment, the intangible knowledge assets of enterprises are very important to improve the long-term competitiveness of enterprises, but DuPont analysis can not solve the valuation problem of intangible assets.