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MAF ratios > DuPont Decomposition > Flashcards

DuPont Decomposition Flashcards

Helps to see how different factors influence ROE/ROA/ROCE to know what to improve if the ratios are low

1
Q

ROE in 2

A

Net Income1/Sales1 * Sales1/Total Equity0

net margin * sales to equity

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2
Q

ROE in 3

A

Net Income1/Sales1 * Sales1/Total Assets0 * Total Assets0/Total Equity0
(net margin * asset turnover * equity multiplier)

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3
Q

ROE in 5

A

Net Income1/Pretax Profit1 * Pretax Profit/EBIT1 * EBIT1/Sales1 * Sales1/Total Assets0 * Total assets0/Total Equity0
(tax burden * interest burden * profit margin * asset turnover * equity multiplier)

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4
Q

ROA

A

EBIT1/Sales1 * Sales1/Total Assets0

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5
Q

ROCE

A

EBIT1/Sales1 * Sales1/Capital Employed0

Capital employed = Equity + Dib

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MAF ratios (8 decks)

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