imported>Doug Williamson |
imported>Doug Williamson |
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| ''Financial analysis - ratio analysis.''
| | A state from which there is no pre-existing tendency to move. |
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| DuPont analysis is a form of financial ratio analysis.
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| It is based on the insight that key financial ratios can often be broken down, in turn, into two or more component ratios.
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| Examining the component ratios, in turn, may yield further insights and opportunities for improvement.
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| For example, Return on Equity can be broken down into three components:
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| *Net profit margin;
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| *Asset turnover; and
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| *Leverage.
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| Measuring and targeting different managers and corporate functions appropriately, can ensure that everyone is pulling in the same direction.
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| This consistency is sometimes known as ''goal congruence''.
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| The ratios are sometimes set out in a pyramid-shaped diagram, with the analysis being known as the ''DuPont pyramid of ratios''.
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| == See also == | | == See also == |
| * [[Asset turnover ]] | | * [[Market mechanism]] |
| * [[Financial analysis]] | | * [[Equilibrium unemployment]] |
| * [[Goal congruence]]
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| * [[Leverage]]
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| * [[Net profit margin]]
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| * [[Price to earnings ratio]]
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| * [[Profitability]]
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| * [[Profitability ratio]]
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| * [[Ratio analysis]]
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| * [[Return on equity]]
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| [[Category:Financial_management]]
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| [[Category:Knowledge_and_information_management]]
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| [[Category:Planning_and_projects]]
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| [[Category:Accounting,_tax_and_regulation]]
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| [[Category:The_business_context]]
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| [[Category:Corporate_finance]]
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