Traditional Culture Encyclopedia - Traditional stories - Briefly describe the concept and basic framework of the DuPont analysis method

Briefly describe the concept and basic framework of the DuPont analysis method

DuPont Analysis is a comprehensive approach to analyzing the financial position of an enterprise using the relationship between several key financial ratios. Specifically, it is a classical 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 a number of financial ratios, which helps to analyze and compare the operating performance of the enterprise in depth. Since this analysis method was first used by DuPont, it is called DuPont Analysis.

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