DuPont Analysis

Description

The DuPont Analysis is a financial performance framework that helps

investors and financial analysts decompose a company's Return on Equity
(ROE) into its constituent parts. This template performs a complete DuPont
Analysis in Excel.
The analysis provides insights into the main drivers and shortcomings
relative to the Return on Equity metric by breaking it down into several
multiples. This methodology allows for differentiating between profitable
organizations and highly leveraged entities.

This Excel model is for educational purposes only. Strictly Confidential

All content is Copyright material of 365 Financial Analyst ®

© 2021, 365 Financial Analyst ®

ABC Corporation
Statement of Financial Position
As at 31st December
Current year Previous year
USD in million Note Y3 Y2 Y1

ASSETS
Non-current assets
Property, plant and equipment 5 107,099 105,050 104,077
Intangible assets 7 1,346 1,209 849
Deferred tax assets 16 691 642 719
Loans granted 9 1,198 368 318
Total non-current assets 110,334 107,269 105,963

Current assets
Inventories 10 25,369 23,758 23,432
Trade and other receivables 11 26,247 24,617 26,115
Marketable securities 9 3,346 3,129 3,045
Cash and cash equivalents 12 15,945 9,497 2,998
Total current assets 70,907 61,001 55,590
Total assets 181,241 168,270 161,553

EQUITY AND LIABILITIES

Capital and reserves attributable to owners
Common share capital 13 24,867 22,802 20,345
Additional paid-in capital 11,802 11,980 13,802
Retained earnings 61,141 50,504 40,390
Total owners' equity 97,810 85,286 74,537
Non-controlling interest 33,628 28,496 24,246
Total equity 131,438 113,782 98,783

Liabilities
Non-current liabilities
Long-term debt 14 16,982 20,994 25,781
Deferred tax liabilities 16 797 793 669
Retirement benefit obligations 15 522 421 377
Total non-current liabilities 18,301 22,208 26,827

Current liabilities
Short-term debt 14 12,492 14,022 17,970
Trade and other payables 18 18,699 18,096 17,802
Current income tax liabilities 311 162 171
Total current liabilities 31,502 32,280 35,943
Total liabilities 49,803 54,488 62,770
Total equity and liabilities 181,241 168,270 161,553

- - - Check!
ABC Corporation
Statement of Comprehensive Income
For the Year Ended 31st December

Current year Previous year

USD in million Note Y3 Y2

Revenue
Sales revenue 19 191,504 172,829
Other revenue from operating activity 19 7,341 7,312
Total Revenue 198,845 180,141

Cost of goods sold (COGS) (150,292) (138,616)

Gross Profit 48,553 41,525

Administrative costs (5,349) (4,906)

Selling costs (17,612) (15,990)
Other costs (3,041) (2,032)
Total operating expenses (26,002) (22,928)

Operating profit (EBIT) 22,551 18,597

Interest expense 21 (2,725) (2,992)

Profit before tax (EBT) 19,826 15,605

Income tax expense 22 (2,128) (1,643)

Net income 17,698 13,962

Common shares outstanding 10,000 10,000

Common dividend per share ($) 0.88 0.65
Total dividends declared 8,800 6,500
Share price (in $) 2.95 2.15
Market capitalization 29,500 21,500
* lease payments = (2,281) (2,475)
ABC Corporation
DuPont Analysis

2-Way Approach RoE = net profit margin x equity turnover

net income net income revenue

= x
average equity revenue average equity

Current year (Y3): 14.43% = 8.90% x 1.62

Previous year (Y2): 13.14% = 7.75% x 1.69

3-Way Approach RoE = net profit margin x asset turnover x financial leverage ratio

net income net income revenue average total assets

= x x
average equity revenue average total assets average equity

Current year (Y3): 14.43% = 8.90% x 1.14 x 1.43

Previous year (Y2): 13.14% = 7.75% x 1.09 x 1.55

5-Way Approach RoE = tax burden x interest burden x operating profit margin x

net income net income EBT EBIT

= x x x
average equity EBT EBIT revenue

Current year (Y3): 14.43% = 89% x 88% x 11.34% x

Previous year (Y2): 13.14% = 89% x 84% x 10.32% x
 asset turnover x financial leverage ratio

revenue average total assets

x
average total assets average equity

1.14 x 1.43
1.09 x 1.55