Roe Equation Dupont. Dupont roe is calculated as. The dupont roe is calculated by multiplying the net profit margin asset ratio and equity multiplier together.
Here s a simple example to illustrate dupont roe formula. Or dupont roe 50 000 300 000 300 000 900 000 900 000 150 000. Dupont roe 11 27 48 30 97 48.
Or dupont roe net income revenues revenues total assets total assets shareholders equity.
Under dupont analysis return on equity is equal to the profit margin multiplied by asset turnover multiplied by financial leverage. Roe net income shareholders equity roe provides a simple metric for evaluating investment returns. Here s a simple example to illustrate dupont roe formula. By comparing a company s roe to the industry s average something may be pinpointed about the company s competitive advantage.
