DuPont Analysis ROE/ROA Calculation to analyze the company fundamental performance
DuPont Identity ROE/ROA Calculator
An online DuPont model calculator to evaluate the component parts of a company return on equity.
DuPont Identity or DuPont Model Formula
Profit Margin = Net income / Net Sales
Total Asset Turnover = Net Sales / Total Assets
Financial Leverage = Total Assets / Total equity
Return on Equity (ROE) = Profit Margin x Total Asset Turnover x Financial Leverage
Return on Assets (ROA) = Profit Margin x Total Asset Turnover
Example
Year1 | year2 | |
---|---|---|
Net Income | $1000 | $1200 |
Net Sales | $10,000 | $10,000 |
Profit Margin | 0.1 | 0.12 |
Net Sales | $10,000 | $10,000 |
Total Assets | $5,000 | $4,800 |
Turnover | 2 | 2.08 |
Total Assets | $5,000 | $4,800 |
Equity | $2,000 | $2,000 |
Financial Leverage | 2.5 | 2.4 |
ROE | 50% | 60% |