Finance Formulas / July 19, 2018 / Luz Tyson
DuPont analysis is a fundamental performance measurement framework popularized by the DuPont Corporation and is also referred to as the "DuPont identity." DuPont analysis is a useful technique used to decompose the different drivers of the return on equity (ROE). Decomposition of ROE allows investors to focus their research on the distinct company performance indicators otherwise cursory evaluation.
A business valuation might include an analysis of the company's management, its capital structure, its future earnings prospects or the market value of its assets. The tools used for valuation can vary among valuators, businesses and industries. Common approaches to business valuation include review of financial statements, discounting cash flow models and similar company comparisons.
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