DuPont analysis
Expression which breaks ROE (return on equity) into three parts
DuPont analysis
Dupont analysis is a tool used in financial analysis, where return on equity (ROE) is separated into its component parts. Useful in several contexts, this "decomposition" of ROE allows financial managers to focus on the key metrics of financial performance individually, and thereby to identify strengths and weaknesses within the company that should be addressed. Similarly, it allows investors to compare the operational efficiency of two comparable firms.
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