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What is DuPont Analysis
DuPont Analysis is a term that refers to the decomposition of ROA and ROE indicators. DuPont chart is considered a basic pyramid structure. It belongs to the pyramid structures of ratios.

DuPont Analysis is a term that refers to the decomposition of ROA and ROE indicators. DuPont chart is considered a basic pyramid structure. It belongs to the pyramid structures of ratios.

Basic equation for calculation:

ROA = ROS × Asset Turnover Ratio, i.e.

EBIT/Assets= EBIT/Sales × Sales/Assets

or

ROE = EAT/Sales × Sales/Assets× Assets/Equity

DuPont chart example - decomposition of ROE:

DuPont chart ManagementMania logo

What is the DuPont Analysis in practice for?

DuPont Analysis is used for the revelation of the basic factors of efficiency. It completes the profitability ratios.

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Last update: 07.08.2015

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