Continental Free Trade Area and DuPont analysis: Difference between pages
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imported>Doug Williamson (Create page. Source: The Treasurer, October 2018, p9.) |
imported>Doug Williamson (Create page. Source - CFI - https://corporatefinanceinstitute.com/resources/knowledge/finance/dupont-analysis/) |
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'' | ''Financial analysis - ratio analysis.'' | ||
DuPont analysis is a form of financial ratio analysis. | |||
It is based on the insight that key financial ratios can be broken down, in turn, into two or more component ratios. | |||
Examining the component ratios, in turn, may yield further insights and opportunities for improvement. | |||
==See also== | |||
*[[ | For example, Return on Equity can be broken down into three components: | ||
*[[ | |||
*[[ | *Net profit margin; | ||
*[[ | *Asset turnover; and | ||
*[[ | *Leverage. | ||
Measuring and targeting different managers and corporate functions appropriately, can ensure that everyone is pulling in the same direction. | |||
This consistency is sometimes known as ''goal congruence''. | |||
The ratios are sometimes set out in a pyramid-shaped diagram, with the analysis being known as the ''DuPont pyramid of ratios''. | |||
== See also == | |||
* [[Asset turnover ]] | |||
* [[Financial analysis]] | |||
* [[Goal congruence]] | |||
* [[Leverage]] | |||
* [[Net profit margin]] | |||
* [[Price to earnings ratio]] | |||
* [[Profitability]] | |||
* [[Profitability ratio]] | |||
* [[Ratio analysis]] | |||
* [[Return on equity]] | |||
[[Category:Financial_management]] | |||
[[Category:Knowledge_and_information_management]] | |||
[[Category:Planning_and_projects]] | |||
[[Category:Accounting,_tax_and_regulation]] | |||
[[Category:The_business_context]] | |||
[[Category:Corporate_finance]] | |||
Revision as of 20:51, 30 July 2021
Financial analysis - ratio analysis.
DuPont analysis is a form of financial ratio analysis.
It is based on the insight that key financial ratios can be broken down, in turn, into two or more component ratios.
Examining the component ratios, in turn, may yield further insights and opportunities for improvement.
For example, Return on Equity can be broken down into three components:
- Net profit margin;
- Asset turnover; and
- Leverage.
Measuring and targeting different managers and corporate functions appropriately, can ensure that everyone is pulling in the same direction.
This consistency is sometimes known as goal congruence.
The ratios are sometimes set out in a pyramid-shaped diagram, with the analysis being known as the DuPont pyramid of ratios.
