Traditional Culture Encyclopedia - Traditional virtues - What is the traditional DuPont analytical system?

What is the traditional DuPont analytical system?

Dupont analysis system uses the relationship between financial ratios to comprehensively evaluate and analyze the financial situation and economic benefits of enterprises.

The core formula of DuPont system:

Net interest rate of equity = net interest rate of assets × equity multiplier

Net interest rate of assets = net interest rate of sales × asset turnover rate

Net interest rate of equity = net interest rate of sales × asset turnover rate × equity multiplier

The basic framework of DuPont analysis system;

Indicators used in business strategy: net interest rate of total assets (net operating interest rate, total assets turnover times).

Indicators of financial policy application: equity multiplier (financial leverage).

Application of DuPont analysis system;

Analysis method: Factor analysis.

Net interest rate of equity = net interest rate of sales × total assets turnover rate × equity multiplier