When calculating financial ratios that mix balance sheet numbers with income statement numbers like this one, it’s important take an average of the beginning and ending balance sheet numbers for the period, which is what we have done here. The formula for that is ROE = Net Income/Equity, as below: For our purposes, we are using the most recently filed Form 10-K annual report for Apple, Inc., dated 29 September 2012.Ī DuPont analysis begins with the company’s return on equity (ROE). One of the nice things about the DuPont analysis is that all the numbers can be taken straight from the income statements and balance sheets provided by companies in their quarterly and annual earnings releases or SEC filings. The DuPont analysis looks at why ROE is what it is and identifies some of the underlying drivers of the ratio. ROE looks at how much a company earned in the previous period compared with the total amount of owners’ equity invested in the business.
The DuPont analysis is a way of decomposing and examining the financial ratio return on equity (ROE). chemical company that began systematically looking at these numbers in the 1920s. One of the more interesting and insightful models or systems in financial analysis is the DuPont analysis, named after the U.S.
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