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Du Pont Analysis Presented by: Group 3A Arif Aditi Deepak Rushit Sushant Shreeram May 2, 2009
Du Pont Analysis ,[object Object],   financial statements.  ,[object Object]
  ROE is broken into two parts: ROA and Equity Multiplier
  ROA is further drilled to Margin Ratios and Turnover ratios.
  Higher the RoE, more favourable is the organization.
Margin Ratios: This ratio, also known as return as sales (ROS), measures the amount of  net profit earned by each dollar of revenue. It is computed as: Profit after Tax / Sales. ,[object Object], indicates how many times the assets were turned over in a period. It is computed as:   Sales / Total Assets ,[object Object], investment. It is computed as: Total Assets/ Owners Equity ,[object Object],  rather than at net book value.
Du Pont Analysis Turn Over Ratios Leverage Ratios Margin Ratios Sales Net Profit Total Assets Sales Total Assets Owner’s Equity Net Profit Return on Equity =  (ROE)  Owner’s Equity
Du Pont Analysis of Nestle for the FY 2007-08

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Du Pont Presentation

  • 1. Du Pont Analysis Presented by: Group 3A Arif Aditi Deepak Rushit Sushant Shreeram May 2, 2009
  • 2.
  • 3. ROE is broken into two parts: ROA and Equity Multiplier
  • 4. ROA is further drilled to Margin Ratios and Turnover ratios.
  • 5. Higher the RoE, more favourable is the organization.
  • 6.
  • 7. Du Pont Analysis Turn Over Ratios Leverage Ratios Margin Ratios Sales Net Profit Total Assets Sales Total Assets Owner’s Equity Net Profit Return on Equity = (ROE) Owner’s Equity
  • 8. Du Pont Analysis of Nestle for the FY 2007-08
  • 9. Du Pont Analysis of Cadbury for the FY 2007-08
  • 10. Comparison b/w Nestle & Cadbury’s 2008…
  • 11.
  • 12.

Notas del editor

  1. Intro. About Cadbury – All know this world class company. This company was chosen as I cant resist choclates. Therefore, over and above to educate you all, it was to motivate myself .Cadbury is a direct competitor to Nestle and therefore it is relevant for different stake holders to compare these two companies and take necessary decisions.We did a similar exercise on Cadbury’s as done for Nestle.A point to be noted here is, that the difference in currencies do not matter as the entire Du Pont analysis on the basis of Ratios of internal parameters. Therefore the end result is in the normal number units and currencies are nullified… Though different companies, under different geographies might follow different accounting practices, the underlying facts would remain the same. An end user making these analysis needs to keep this in mind and obsrve the financial instruments, by using data at his/her discretion while getting the totals of each parameter. The ratios then obtained are used for comparing between two or more companies.To give an understanding on how comparisons are done, attached is a snap shot of the Du Pont performed on Cadbury’s which can be looked in detail if necessary. We have used few ratios for the understanding of all on how to make comparisons. The next slide would sure few ratios compared under various categories within DuPont