How to Use the DuPont Model


 
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How to Use the DuPont Model
claude rougeot, Management Consultant, Cote Divoire (Ivory Coast), Member
Hello,
DuPont Model is a very ancient formula and it is very useful.
In the simpler expression = EBIT / Revenue * Revenue / funds engaged =.
Funds engaged = fixed assets plus working capital needed.
The first term of formula gives the result of the management work, what is the margin produced! The second term indicates the productivity of funds committed in a business.
My professional speciality is the study of investments and to raise funds to finance the project.
Heavy industry, large commercial margin and low productivuty of capital. How many $ I produce with one $ of investment.
At the opposite, light industry, low margin and high productivity of funds invested.
In my case, the taxation and modality of financing are not taken in consideration in a first appraisal. The last is completed by the IRR calculation.
With the two, Dupont Model simplfied and IRR you can advise companies in a first appraisal of projects (large spectrum at the begi...Sign up
 

 
Multi-year Dupont Model
Wes Patterson, United States, Member
I have found that a single year snapshot of the Dupont Model can be misleading, while a multi-year view is quite informative.
Such a perspective ...Sign up
 

 
Dupont Model Contributions
claude rougeot, Management Consultant, Cote Divoire (Ivory Coast), Member
Dear Wes,
Thank you for this comment.
Usually, financial analysis are statics (one year) and dynamic considering the past period of 2 or 3 y...Sign up
 

 















 


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