Dupont Analysis
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- Опубликовано: 15 сен 2024
- Financial statement analysis, ratio analysis
Ratio Analysis Part 1 • Ratio Analysis Part 1
Ratio Analysis Part 2 • Ratio Analysis Part 2
Ratio Analysis Part 3 • Ratio Analysis Part 3
Internal and Sustainable Growth • Internal and Sustainab...
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Another thank you from a CFA Lvl I candidate for clearly articulating the material. I have incorporated a few of your videos into my daily study routine. Accounting truly is a necessary evil which avoided at all cost while earning my degree [microecon]. Your videos on FRA material are EXTREMELY appreciated [DTA's / DTL's perhaps?..hint hint]. BTW my wife says you sound like Brandon Lee and pokes her head in thinking that i'm watching a Brandon Lee movie instead of studying!
Thank you for this video. It really helped me understand DuPont Analysis better than my study books.
That was a really useful and good explanation of the DuPont analysis! Many thanks!
Thanks...Helped alot...!! Have an examination today and this is one of the topics...easier explained by you than whats given in the book that i have !!! Thanks Mate !!
Thanks! Took the exam this past Saturday. Difficult, but doable if you have discipline and can work hard. My hat goes off to you and anyone who has the charter. Cheers, JM
Pretty nice and thorough. Helped clarify some of my CFA [L1] prep material. Thanks!
Thank you so much! You helped me a lot especially so I could understand and not get confused. It is hard to understand sometimes when you have a learning disability, but your video sure helped me to understand the material a whole lot better.
Thank you! It helped me understand the analysis much better.
Good luck with the CFA exam. I did the program from 1997-1999.
thank you very much! this is very helpful and easy to understand!
Outstanding video, thanks champ
Great explanation, thanks, helped me a lot to understand the concept
Very well explained..Thank you very much :)
First use the DuPont equation to compute the ROE = profit margin x asset turnover x financial leverage. Then use this is the sustainable growth rate equation = (ROE x retention ratio)/(1 - ROE x rr). See my video on the topic.
You should ROE in as a decimal .1059, etc. Also, is the retention rate 100%? Then put in 1.00.
C.) How did Genentech cope with this challenge?
D.) Calculate Genentech's sustainable growth rate in 2007 assuming an asset turnover of 0.72 times. Calculate the sustainable growth rate in 2007 assuming a financial leverage of 2.20 times. Calculate the sustainable growth rate in 2007 assuming both of these changes occur.
Appreciate the video, it definitely helped with my review.
Mr. Moy, Can you help me understand this question and which formula I am suppose to use?
Genentech, Inc. is a California-based biotech pioneer recently acquired by Swiss pharmaceutical giant Roche Holding AG. Roche paid $46.8 billion in cash for the 44 percent of Genentech it did not already own, implying a market value of over $100 billion for the entire company. For a look at Genentech's recent sustainable growth challenges, consider the following selected financial data:
Profit Margin (%)- 2006- 22.8
Retention Ratio (%)- 2006- 100.0
Asset Turnover (X)- 2006- 0.63
Financial Leverage (X)- 2006- 1.99
Growth Rate in Sales (%)- 2006- 40.0
Profit Margin (%)- 2007- 23.6
Retention Ratio (%)- 2007- 100.0
Asset Turnover (X)- 2007- 0.62
Financial Leverage (X)- 2007- 2.00
Growth Rate in Sales (%)-2007- 26.3
A.) Calculate Genentech's annual sustainable growth rate for the years 2003-2007.
B.) Did Genentech face a growth management challenge during this period?
Is this problem correct as follows:
2003 (ROE) = Profit Margin x Asset Turnover x Financial Leverage
= 17.0 x 0.38 x 1.64
= 10.59 (Return on Equity)
Sustainable Growth Rate Equation:
(ROE x retention ratio) / (1 - ROE x retention ratio)
= 10.59 x 100.0 / (1 - 10.59 x 100.0)
= 1059 / (1 - 1059)
= 1059 / -1058
= - 1.00
Do I divide -1058 into 1059 or 1059 divided into -1058? I think its weird because every single problem I keep coming up with a -1.00 for the sustainable growth rate.
Profit Margin (%)- 2003- 17.0
Retention Ratio (%) - 2003- 100.0
Asset turnover (X)- 2003- 0.38
Financial Leverage (X)- 2003- 1.64
Growth rate in sales (%) - 2003- 26.1
Profit Margin (%)- 2004- 17.0
Retention Ratio (%)-2004- 100.0
Asset Turnover (X)-2004- 0.49
Financial Leverage (X)-2004- 1.44
Growth Rate in Sales (%)-2004-40.0
Profit Margin (%)- 2005- 19.3
Retention Ratio (%) - 2005- 100.0
Asset Turnover (X)- 2005- 0.55
Financial Leverage (X)- 2005- 1.79
Growth Rate In Sales (%)- 2005- 43.5