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Title: DuPont Analysis Example
Description: Teaches students how to calculate Net Income, equity multiplier as well as net profit margin.
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Assignment Example DuPont
Analysis

I

CSU Math Center | 1-800-977-8449 x6538 | teamsucceed@columbiasouthern
...
adobeconnect
...
earned a net profit margin of 5 percent last year and had an equity multiplier of 3
...
If its total assets are
$100 million and its sales are $150 million, what is the firm's return on equity? (Round to one decimal place
...
:
total assets

$100M
total sales

$150M
 NI 

net profit margin



5%  

 sales 

equity multiplier



3 






...
net profit margin & sales

NI
2
...
equity & NI

ROE
...
5M

Step 2:

equity multiplier  3 



1


 1  total liabilities 
total assets 





TA

 common equity 

 
equity multiplier  3



common equity



$100M

 Note: 100  3 = 33
...
33M

Step 3:
ROE

$7
...
33M 


 22
Title: DuPont Analysis Example
Description: Teaches students how to calculate Net Income, equity multiplier as well as net profit margin.
Buy These NotesPreview