DuPont Analysis Calculator

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The 3-factor model splits ROE into net profit margin, asset turnover, and financial leverage. The 5-factor model further separates the profit margin into tax burden, interest burden, and EBIT margin.
Total net sales or revenues for the period from the income statement.
USD
Net income after all expenses, interest, and taxes from the income statement.
USD
Average of beginning and ending total assets from the balance sheet. Using the average smooths out seasonal swings.
USD
Average of beginning and ending shareholders' equity from the balance sheet.
USD
Return on Equity (ROE)Strong ROE
25%

Net income as a percentage of shareholders equity

Return on Assets (ROA)0.13%
Net Profit Margin0.1%
Asset Turnover1.25x
Equity Multiplier (Financial Leverage)2x
ROE25%
ROA0.13%
Net Margin0.1%
25% x
Poor<5%Weak5%-12%Acceptable12%-20%Strong20%+

ROE is 25.0%: a solid return for most industries.

  • Net profit margin of 10.0% means you keep 10.0 cents of every dollar of revenue as profit.
  • Asset turnover of 1.25x indicates each dollar of assets generates 1.25 dollars in revenue.
  • Equity multiplier of 2.00x reflects moderate financial leverage.
  • ROA of 12.5% shows how efficiently total assets are converted into profit, independent of how the company is financed.

Next stepROE above cost of equity (typically 8-12% for most industries) creates value for shareholders. Compare to your sector benchmark to put the number in context.

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