DuPont Sys

http://breakingdownfinance.com
Inputs
Net Income $20,000
Earnings Before Tax (EBT) $30,000
Earnings Before Interest and Tax (EBIT) $35,000
Revenue $500,000
Average Total Assets $250,000
Average Total Equity $150,000

Original DuPont system of Analysis

Return on Equity = Net income (x) Revenue (x)

Revenue Average Total Assets

13.33% = 0.04 2.00

Extended (5-way) DuPont Equation

Return on Equity = Net income (x) EBT (x)

EBT EBIT

13.33% = 66.67% 0.86

DuPont System of Analysis

Outputs
Tax burden 66.667%
Interest burden 85.714%
EBIT margin 7.000%
Asset turnover 2.00
Financial leverage 1.67

ROE 13.33%

Average Total Assets

Revenue

1.67

EBIT (x) Revenue (x)

Revenue Average Total Assets

7.00% 2.00
Average Total Assets
Average Total Equity

1.67