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  • Net Income Earnings Before Taxes Net Income Sales Extended Dupont Roe Extended Dupont Roe

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    Kavan Amin
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    The document presents 10 equations for calculating different financial metrics: 1) ROA is calculated as net income divided by total assets. 2) ROE is calculated as net income divided by total equity. 3) Total assets divided by total equity equals one minus the total debt ratio. 4) ROE can be calculated as net income divided by total assets minus total debt. 5) ROE can also be calculated using net income, sales, total assets, and total debt.

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    The document presents 10 equations for calculating different financial metrics: 1) ROA is calculated as net income divided by total assets. 2) ROE is calculated as net income divided by total equity. 3) Total assets divided by total equity equals one minus the total debt ratio. 4) ROE can be calculated as net income divided by total assets minus total debt. 5) ROE can also be calculated using net income, sales, total assets, and total debt.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pdf or txt
    19 views2 pages

    Net Income Earnings Before Taxes Net Income Sales Extended Dupont Roe Extended Dupont Roe

    Uploaded by

    Kavan Amin
    The document presents 10 equations for calculating different financial metrics: 1) ROA is calculated as net income divided by total assets. 2) ROE is calculated as net income divided by total equity. 3) Total assets divided by total equity equals one minus the total debt ratio. 4) ROE can be calculated as net income divided by total assets minus total debt. 5) ROE can also be calculated using net income, sales, total assets, and total debt.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    of 2

    𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑆𝑎𝑙𝑒𝑠

    𝑅𝑂𝐴 = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 = 𝑋 (1)


    𝑆𝑎𝑙𝑒𝑠 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
    𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
    𝑅𝑂𝐸 = = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 𝑋 (2)
    𝐸𝑞𝑢𝑖𝑡𝑦 𝐸𝑞𝑢𝑖𝑡𝑦
    𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 1 1
    = 1− 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜 = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 (3)
    𝑇𝑜𝑡𝑎𝑙 𝐸𝑞𝑢𝑖𝑡𝑦 1−
    𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

    𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡


    𝑅𝑂𝐸 = 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 ÷ (1 − 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠) (4)

    𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒 𝑆𝑎𝑙𝑒𝑠


    𝑋
    𝑆𝑎𝑙𝑒𝑠 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠
    𝑅𝑂𝐸 = 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 (5)
    (1− )
    𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

    𝑁𝑒𝑡 𝑃𝑟𝑜𝑓𝑖𝑡 𝑀𝑎𝑟𝑔𝑖𝑛 𝑋 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡 𝑇𝑢𝑟𝑛𝑜𝑣𝑒𝑟


    𝑅𝑂𝐸 = (1 – 𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 𝑅𝑎𝑡𝑖𝑜)
    (6)
    𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝐵𝑒𝑓𝑜𝑟𝑒 𝑇𝑎𝑥𝑒𝑠 𝐸𝐵𝑇
    𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝐵𝑢𝑟𝑑𝑒𝑛 = = (7)
    𝐸𝑎𝑟𝑛𝑖𝑛𝑔𝑠 𝐵𝑒𝑓𝑜𝑟𝑒 𝐼𝑛𝑡𝑒𝑟𝑒𝑠𝑡 𝑎𝑛𝑑 𝑇𝑎𝑥𝑒𝑠 𝐸𝐵𝐼𝑇
    Net Income 𝑁𝐼
    𝑇𝑎𝑥 𝐵𝑢𝑟𝑑𝑒𝑛 = = (8)
    Earnings Before Taxes 𝐸𝐵𝑇
    Net Income 𝐸𝐵𝐼𝑇 𝐸𝐵𝑇 𝑁𝐼
    Net Profit Margin = = 𝑋 𝑋 (9)
    Sales 𝑆𝑎𝑙𝑒𝑠 𝐸𝐵𝐼𝑇 𝐸𝐵𝑇
    Extended DuPont ROE

    Extended DuPont ROE


    𝐸𝐵𝐼𝑇 𝑋 𝐸𝐵𝑇 𝑋 𝑁𝐼 𝑋 𝑆𝑎𝑙𝑒𝑠
    = 𝑆𝑎𝑙𝑒𝑠 𝐸𝐵𝐼𝑇 𝐸𝐵𝑇 𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠 (10)
    (1 −
    𝑇𝑜𝑡𝑎𝑙 𝐷𝑒𝑏𝑡 )
    𝑇𝑜𝑡𝑎𝑙 𝐴𝑠𝑠𝑒𝑡𝑠

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