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    Accounting For Your Prosperity

    Alison Martanovic

    Alison Martanovic is a Senior Manager with Meaden & Moore and has been with the firm since graduating from John Carroll University in 2009. She coordinates and oversees daily fieldwork, prepares financial statements and executes various other aspects of the assurance engagement. Alison works with closely-held, entrepreneurial companies, serving a wide variety of industries including service, manufacturing, and construction both in the middle market and small business segments. She also works directly with numerous Not-for-Profit organizations performing attestation services and conducts audits of 401(k) plans, pension, and health and welfare plans.

    Recent Posts

    How to Calculate Return on Equity with a DuPont Analysis

    Posted by Alison Martanovic on Jul 15, 2014 12:22:00 PM

    Topics: Accounting & Auditing

    A DuPont analysis is an assessment of a company’s Return on Equity (ROE). Using the DuPont formula, an analyst can easily determine a company’s financial strengths and weaknesses. According to the DuPont analysis, ROE is affected by three elements:

    1. Operating efficiency, which is measured by profit margin
    2. Asset management, which is measured by total asset turnover
    3. Financial leverage, which is measured by the equity multiplier

    The DuPont equation can be calculated by multiplying:

    ROE = Net Profit Margin (Profit/Sales) x Return on Assets (Sales/Assets) x Financial Leverage (Assets/Equity)

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