DuPont Analysis Calculator
Break down a company’s Return on Equity (ROE) into profitability, efficiency, and leverage components using the three-step DuPont analysis.
What is DuPont analysis?
DuPont analysis breaks Return on Equity (ROE) into three components: profitability, efficiency, and financial leverage. This makes it easier to see whether a company’s ROE is driven by strong profit margins, efficient use of assets, higher debt-fueled leverage, or some combination of the three.
The formula
ROE = Net Profit Margin × Asset Turnover × Equity Multiplier, where Net Profit Margin = Net Income / Revenue, Asset Turnover = Revenue / Total Assets, and Equity Multiplier = Total Assets / Shareholder Equity.
This tool is for general educational purposes. Comparing DuPont components is most meaningful between similar companies in the same industry, since typical margins, turnover, and leverage vary widely by sector.