While choosing which assets to include in a portfolio, an in-depth analysis of the investment alternatives is made. If one of the alternatives is an ownership share in a corporation, then it is observed that the DuPont ratio is the best tool used to analyze that investment. The DuPont model was internally developed by Du Pont as a tool to measure its investment projects, … [Read more...]
DuPont analysis
DuPont analysis is an expression which breaks ROE (Return On Equity) into three parts. With this method, assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE). It is also known as "DuPont identity". A type of analysis that examines a company's Return on Equity (ROE) by breaking it into three main … [Read more...]