Question

importance of Dupont analysis in comparing two companies. write a paragraph

Answer 1

Importance of DuPont analysis in comparing two companies will be related to comparing the return on investment of these companies by relating to multiple factors which should be used for decision making. DuPont analysis would be looking for comparison of the operating efficiency of the company and it will also be looking for comparison of Net Asset turnover margin because it is always trying to look into the ability of this firm in order to efficiently use the Asset for maximizing the rate of return and it is also looking for maximizing the rate of return on the investments so DuPont analysis can be a useful tool in order to determine the performance of two industries in respect of each other when it comes to determination of profitability.