DuPont Analysis

DuPont Analysis breaks down a company's return on equity (ROE) into three main parts: profit margin, asset efficiency, and leverage. It helps understand what drives profitability by showing how much profit is earned from sales, how effectively assets are used to generate sales, and the impact of debt on returns. Essentially, it helps identify which areas a company excels or needs improvement in to increase overall profitability. This clear, structured approach provides valuable insights for investors and managers making informed decisions.