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Back in 1 9 2 0 , the management at DuPont Corporation developed a model called the DuPont analysis to assess the company's return on
Back in the management at DuPont Corporation developed a model called the DuPont analysis to assess the company's return on equity ROE accurately. Although ROE is a true bottomline measure of performance, it can be decomposed to reveal even more detailed information about a company.
Review the following videos before answering the assignment:
Corporate Financial Statement Analysis:
Return on Equity.
Corporate Financial Statement Analysis: The
DuPont Framework
Describe the benefits of the DuPont analysis to deconstruct a firms ROE. Utilizing MSN Money or Yahoo Finance, choose a real company and locate its most recent financial statements. Include the following in your analysis:
Identify and record key profitability ratios, including ROE
Decompose the ROE with the DuPont analysis
Discuss the implications found based on the dissection of ROE with the DuPont analysis
Compare the decomposed ratios to the industry
Provide recommendations to the company based on your analysis. Include an introduction paragraph and conclusion paragraph
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