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What is the Dupont equation?
Questioner:Wyatt Morgan 2023-04-07 07:57:24
The most authoritative answer in 2024
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Taylor Davis——Studied at the University of Cambridge, Lives in Cambridge, UK.
As a subject matter expert in finance and economics, I can provide you with an explanation of the DuPont equation. The DuPont equation is a financial formula used to break down the components of return on equity (ROE), which is a measure of a company's profitability. The equation was developed by the DuPont Corporation in the 1920s to analyze its own financial performance.
The basic DuPont equation is expressed as follows:
**ROE = Profit Margin × Total Asset Turnover × Equity Multiplier**
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Benjamin Rodriguez——Works at the International Seabed Authority, Lives in Kingston, Jamaica.
DuPont formula (also known as the
DuPont analysis,
DuPont Model,
DuPont equation or the
DuPont method) is a method for assessing a company's return on equity (ROE) breaking its into three parts. The name comes from the
DuPont Corporation that started using this
formula in the 1920s.
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