In this video, learn how to identify the components of the DuPont framework. This is a framework for analyzing company performance.
- The DuPont Framework is a tool … to decompose a company's return on equity … into three dimensions, … profitability, efficiency, and leverage. … Return on equity, or ROE, is a measure … of the amount of profit earned per dollar … of owner investment. … ROE is computed by dividing net income by equity. … In 2018, Walmart's ROE was 9%. … ROE for Target was 26%. … This means that shareholders who invested … $100 in Walmart earned profits of $9 in 2018. … If those shareholders had invested the same $100 in Target, … they would've earned $26. … ROE is the fundamental measure of financial performance … from the standpoint of the shareholders. … How much did we earn for each $100 that we invested? … So, at least in 2018, the Walmart shareholders … didn't do as well as did the shareholders of Target. … Why not? … Well, a quick way to get some insight into this question … is to use the DuPont Framework to decompose … the ROE for both Walmart and Target … to see where Walmart fell short. … Now, the DuPont Framework is named after the DuPont Company, …
- Accounting basics
- Reviewing the balance sheet and income statement
- Credits, debits, and journal entries
- Making financial statements
- Issues in financial accounting
- Revenue recognition
- Deferring taxes
- Analyzing financial statements
Skill Level Beginner
Accounting Foundations: Internal Controlswith Kay Stice1h 46m Intermediate
Cost Accounting: Analyzing Product Profitabilitywith Rudolph Rosenberg56m 49s Intermediate
Why financial accounting?1m 13s
1. Accounting Basics
The accounting equation3m 37s
2. The Financial Statement
3. The Mechanics of Accounting
4. Current Issues in Financial Accounting
5. Financial Statement Analysis
- Mark as unwatched
- Mark all as unwatched
Are you sure you want to mark all the videos in this course as unwatched?
This will not affect your course history, your reports, or your certificates of completion for this course.Cancel
Take notes with your new membership!
Type in the entry box, then click Enter to save your note.
1:30Press on any video thumbnail to jump immediately to the timecode shown.
Notes are saved with you account but can also be exported as plain text, MS Word, PDF, Google Doc, or Evernote.