Dupont analysis is used to illustrate how different factors impact important indicators of financial performance. As such, this can be used to compare companies in a specific industry.This can also be used to conduct 'what-if' analysis.
A change agent starting of analysis on what to change can enter basic information in the model (e.g. sales,liabilities,costs,equity etc) and then get a basic view of current profitability.
This can then be used to identify where possible improvements can be made and their effects.
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This reminds me of my prof at SP Jain..Dr Mankad.Thank for your bringing in your perspective here. Would be able to share if you have a matrix showing Du Pont analysis connecting to What-If through various data points, please ?
ReplyDeleteThanks,
Suchit