How Do We Calculate & Then Interpret the Margin & Turnover Using the Dupont Model?

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Calculating and interpreting the margin and turnover is something you can do using the Dupont model very carefully. Find out how to calculate and interpret margin and turnover using the Dupont model with help from a registered investment adviser in this free video clip.

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Hi, Benjamin Lupu, certified financial planner with Kensington AMI Financial with how do we calculate and then interpret the margin and turnover using the Dupont model? The Dupont model was first devised way back in the 1920s by the Dupont Chemical Company. It brought to business analysis the key term ROE or return on equity. ROE is broken down into three parts, profit margin, real profitability, asset turnover. These measure the efficiency of assets as they are comprised in the company. Equity multiplier refers to financial leverage or the use of debt or credit lines to increase business activity. When these three factors are multiplied using the Dupont model, a net figure for net profit can be derived. When analyzing the efficiency of a business the Dupont model can point out the best potential of an industrial type business using their formula. With how do we calculate and then interpret margin and turnover using the Dupont model, I'm Benjamin Lupu, certified financial planner of Kensington AMI Financial.

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