
Dupont Framework
DuPont Analysis=Net Profit Margin×AT×EM
where:
Net Profit Margin= RevenueNet Income
AT=Asset turnover
Asset Turnover= Average Total AssetsSales
EM=Equity multiplier
Equity Multiplier= Average Shareholders’ Equity
Average Total Assets
The component parts on ROE(Return on Equity) is measured using Dupont Analysis