Use the Du Pont system of financial analysis and the following data to find return on equity:
Question:
Use the Du Pont system of financial analysis and the following data to find return on equity:
• Leverage ratio (assets/ equity).... 2.2
• Total asset turnover.......... 2.0
• Net profit margin.......... 5.5%
• Dividend payout ratio....... 31.8%
DividendA dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...
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Net profit margin Asset tur...View the full answer
Investments
ISBN: 978-0071338875
8th Canadian Edition
Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter
Related Video
The Dupont analysis is an expanded return on equity formula, calculated by multiplying the net profit margin by the asset turnover by the equity multiplier. The DuPont analysis is also known as the DuPont identity or DuPont model.This Video will guide on how to calculate return on Equity and estimate profitability of shareholders using DuPont Analysis.
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