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Course 631 - ratios etc.

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Question:

What are the five components in the DuPont analysis of ROE (in order) and how are these calculated?

Author: Fredrik Holm



Answer:

Tax burden (NI / EBT) * Interest burden (EBT / EBIE) * profit margin (EBIE / Sales)* Asset turnover (Sales / assets) * Financial leverage (assets / shareholders equity)


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