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DuPont Analysis

Originally Published: January 2010


Return on Equity Financial Expression

Efficient use of assets is important for the profitability and growth of any organization. One of the easiest ways to gauge whether a company is an asset creator or cash user is to look at the return on equity (ROE) ratio. ROE is a strong measure of how well management is creating value for shareholders.
In its simplest form, ROE is calculated: