Dupont Analysis Homework Help

Get customized homework help now!

DuPont analysis

DuPont identity is also know as DuPont analysis, DuPont method DuPont equation, or DuPont Model, is an expression that breaks return of equity into three sections. During 1920s the DuPont Corporation started using this equation from where the actual name comes from. 

The basic equation of DuPont method is as follows:

Return of equity = profit margin x asset turnover x equity multiplier = Net sales or profit x assets or sales x equity or assets = net equity or net profit.

  • Operating efficiency is measured by profit margin.
  •  Financial leverage is measure by equity multiplier
  • Assets use efficiency is measured by assets turnover.

Return on Equity

The DuPont analysis breaks down the REO (i.e. the returns which investors obtain from the company or business organization) into three elements.  The DuPont analysis or equation allows the person or analyst to know the sources of the inferior or superior return by comparing between industries or with business organizations in the sale field or industries. Du Pont equation, however, is less functional for a few of the industries, like investment banking, which don’t use certain theory or concepts or for that the concepts are less important.  Variations might be used in some industries, only when they respect the underlying structure of the DuPont method. The Du Pont analyses depend upon the accounting identity, which is, a formula or statement that is by meaning or definition true.

Some of the industries use the DuPont method is as follows

  • High turnover industries
  • High margin industries
  • High leverage industries

It is considered that valuing assets at gross book value would eliminate the incentive in order to avoid investing in the new assets. New asset avoidance could occur as financial accounting depreciation systems artificially produce lower return on equity in the starting years which an asset is placed into service. If return on equity unsatisfactory, the DuPont methods assist to find out the part of the business which is underperforming.


  • What is DuPont method?
  • What is the formula of the DuPont method? is a pioneer in online tutoring and homework help. Our tutors are highly qualified in their subject areas and have been helping students since 2003. For immediate Dupont Analysis homework help, use the homework-help form present on this page. You can also get help with your Dupont Analysis homework by writing to

For instant assistance, click here to start a live-chat with us.

Accounting Homework Help
Name* :
Email* :
Country* :
Phone* :
Subject* :
Attachment* :
Upload another homework (upto 5 uploads max.)

Type Your Questions OR Instructions Below
Type this code and send us your dupont analysis homework questions to get written lessons from expert dupont analysis tutors.
(Type Security Code - case sensitive)
By clicking on the "Get Homework Help" button, you agree to the Terms and Conditions of Classof1. is a safe, secure and trusted website as certified by Norton Secure (powered by VeriSign)
About Us | Terms of Use | Privacy Policy Copyright © 2002-2014 Classof1. All rights reserved.
Live chat assistance with dupont analysis homework help
Live chat assistance with dupont analysis homework help