Which insights can we gain from doing a DuPont analysis? This sequel focuses on how to apply a structured approach to interpreting the numbers: DuPont analysis interpretation ua-cam.com/video/A8Pprbx2uQ8/v-deo.html
My pleasure, Anthony! Thank you for watching and commenting. I have several videos on items within the DuPont equation for you in this playlist: ua-cam.com/video/DQgEoz8izxY/v-deo.html
You made me laugh out loud (in a good way) when you asked if we wanted "even more excitement" when hearing about the 5-STEP DuPont formula. Thank you for the video. :)
:-) You're welcome, Julie! I personally enjoy the DuPont formula so much, that I've made multiple videos on the various aspects of it (even applying them to real life companies!) and compiled them in a playlist: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
Oh my God. I had to take Advance Accounting last semester, and I swear these concepts were so hard for me. I am so glad I found your videos because there are concepts that I did not understand well, but you explained them really well. Thanks🤗🤗🤗🤗
Happy to help, Claudia! I have made some follow-up videos with examples of ROE, ROA, leverage, etc. that might be helpful for you as well: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
You're welcome! Thanks for your support, Carlos! I think you will enjoy this video applying DuPont analysis to Apple's financial statements as well: ua-cam.com/video/DQgEoz8izxY/v-deo.html
Happy to help! Have a look at the related videos in this playlist as well where I dive into the various elements of ROE and apply it to real world companies: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
Thank you! Very happy to hear that. I have a few more examples of the various elements of the DuPont analysis on my channel, like this ROA example ua-cam.com/video/2j8bfR8KqJ0/v-deo.html and a discussion of financial leverage ua-cam.com/video/GESzfA9odgE/v-deo.html Enjoy!
Thanks for the compliment, Elie! I have some related videos for you dealing with specific aspects of the DuPont equation and how to apply it to real life companies: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
@@TheFinanceStoryteller Thank you so much ! I could not find anything on the alternative approach, let me know if you have anything ! I'd sure would want to watch it ! :)
Jazeker! 😎🇳🇱 Nog meer nuttige video's met o.a. voorbeelden van hoe je ROA vergelijkingen tussen bedrijven doet in deze afspeellijst: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html&pp=gAQBiAQB
Thank you, James! I have made a follow-up video to illustrate the Return On Assets formula with numbers, hope you like that one as well! ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
You're welcome, Joslyn! I really like the topic, and have made a few more videos with examples or more in depth discussion of parts of the DuPont equation. Here are two suggestions of follow-up videos to watch: a real-life example of calculating and comparing Return On Assets ua-cam.com/video/2j8bfR8KqJ0/v-deo.html and a video covering financial leverage ua-cam.com/video/GESzfA9odgE/v-deo.html
Good question! The reason for that is that the core calculation is Return On Equity (ROE) = Net Income / Equity. The beauty of the DuPont equation in its 3-step or its 5-step version is that the final outcome of the calculation is the same as ROE. Net Income / Sales times Sales / Assets times Assets / Equity equals Net Income / Equity as both Sales and Assets are in the numerator once and in the denominator once and therefore "cancelled out" in total. Does that make sense?
Hello Paolo! Take a look at my case studies calculating ROA and ROE for real world companies, and you will get a feel for it: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html ua-cam.com/video/DQgEoz8izxY/v-deo.html
Clear explanation. Revising for financial analysis exam and you are making my nights easier. Btw are you from Holland ? Accent sounds familiar. Thank you ! :D
I learn there's slightly different when i learned about roa and roe. In the formula that i learned it used average total asset and average shareholder's equity. But it is different in this video. Can someone explain to me because I'm confuse.
Using average assets and average equity is even more sophisticated than what I explain here. Next step is to take a 5-point average (start of the year, plus 4 quarter-ends) to get even more detailed. It doesn't change the concept itself though....
Hello Edward! Interest rates are very low, so debt/borrowing is a very cheap source of financing. The higher the financial leverage, the higher the ROE can become, but at the same time the higher the risk of bankruptcy if the company for whatever reason gets into some turbulence.... See also my video on financial leverage for a numerical example: ua-cam.com/video/GESzfA9odgE/v-deo.html
Hello Michael! I have recently made a follow-up video zooming in on the financial leverage aspect of the DuPont analysis ROE formula: ua-cam.com/video/GESzfA9odgE/v-deo.html Both my ROE explained video ua-cam.com/video/6fA5N4giHrM/v-deo.html and my ROA explained video ua-cam.com/video/W5CrcMSBARU/v-deo.html have some practical examples of improving ROE. Let me know if these answer your question!
Welcome! Be aware that accounting is an art as well as a science. Context and interpretation are very important. I have met many engineers that struggle with that. If I may suggest, have a look at a few of the videos in my Accounting 101 playlist ua-cam.com/video/b93KBmcXanI/v-deo.html&pp=gAQB , that should get you off to a good start! Feel free to ask questions in the comment section of any of the videos! Happy to help.
Which insights can we gain from doing a DuPont analysis? This sequel focuses on how to apply a structured approach to interpreting the numbers: DuPont analysis interpretation ua-cam.com/video/A8Pprbx2uQ8/v-deo.html
Posted 3 years ago and still holding its value today! Thank-you for all you do👍💯
My pleasure, Anthony! Thank you for watching and commenting. I have several videos on items within the DuPont equation for you in this playlist: ua-cam.com/video/DQgEoz8izxY/v-deo.html
You made me laugh out loud (in a good way) when you asked if we wanted "even more excitement" when hearing about the 5-STEP DuPont formula.
Thank you for the video. :)
:-) You're welcome, Julie! I personally enjoy the DuPont formula so much, that I've made multiple videos on the various aspects of it (even applying them to real life companies!) and compiled them in a playlist: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
Clearest explanation of DuPont analysis technique that I have seen. Thank you. Now I understand
Thank you for the kind words. Glad you enjoyed it!
Here's a recent follow-up video applying DuPont analysis to Apple's 2017 numbers. ua-cam.com/video/DQgEoz8izxY/v-deo.html
Now I realised finance and accounting is a language, with each day I become more fluent in it.
Agree! The more you play around with it, the more you understand, and the more you discover. :-)
Not to be confused with the DuPont approach that Royce DuPont devised for a 1000% ROI
Had never heard of Royce DuPont before, but yes, that is a different topic/person altogether.
@TheFinanceStoryteller wait you're not a DuPont disciple?
@@jjs8426Very few get to work with Mr Royce after all
Oh my God. I had to take Advance Accounting last semester, and I swear these concepts were so hard for me. I am so glad I found your videos because there are concepts that I did not understand well, but you explained them really well.
Thanks🤗🤗🤗🤗
Glad it was helpful! Some more examples and discussion in this playlist: ua-cam.com/video/W5CrcMSBARU/v-deo.html&pp=gAQBiAQB
Thank for you this.. I have my exams today and It'll be helpful for me
Wishing you lots of success in the exams!
Thank you for recommending me this playlist!
Happy to help! I am actually working on another real-world DuPont analysis example right now, should get published soon.
Great analysis - short and sweet. Thank you!
Thank you so much..the vid saved me from a disaster in the exam :D
You're welcome! Happy to help.
Hey, good to see someone from Bangladesh! from which University are you?
You are a savior! The name Finance Storyteller suits you well!
Happy to help, Claudia! I have made some follow-up videos with examples of ROE, ROA, leverage, etc. that might be helpful for you as well: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
This channel saved me from dying because of my Security Analysis assignment.
Happy to help! More good stuff (examples, other ratios) in this playlist: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html&pp=gAQBiAQB
Awsome video!. Finally got to understand the Dupont analysis in an easy and enjoyabe way.....thank you very much Finance Storyteller.
You're welcome! Thanks for your support, Carlos! I think you will enjoy this video applying DuPont analysis to Apple's financial statements as well: ua-cam.com/video/DQgEoz8izxY/v-deo.html
Amazing and easy explanation, thank you !!
Happy to hear that, Ali! More examples of how to apply it to real world companies in this playlist: ua-cam.com/video/bhbDDSohJ84/v-deo.html
Thank you very much, Professor.
Happy to help! Have a look at the related videos in this playlist as well where I dive into the various elements of ROE and apply it to real world companies: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
This was amaaaazing. Good job
Thank you! Very happy to hear that. I have a few more examples of the various elements of the DuPont analysis on my channel, like this ROA example ua-cam.com/video/2j8bfR8KqJ0/v-deo.html and a discussion of financial leverage ua-cam.com/video/GESzfA9odgE/v-deo.html Enjoy!
Excellent explanation.
Thank you, Kevin!
NIce video, thanks
I am here to watch all video
Welcome, Sidiki! UA-cam is open 24/7, so you're welcome to visit anytime!
thanks for the great video
You're welcome! I often use ROE analysis when taking a first look at a company, it gives you a feeling for the big picture.
I wish I had you as a teacher
Thanks for the compliment, Elie! I have some related videos for you dealing with specific aspects of the DuPont equation and how to apply it to real life companies: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
.... and it's a pleasure to have you as an online student on my UA-cam channel! 😎
@@TheFinanceStoryteller Thank you so much ! I could not find anything on the alternative approach, let me know if you have anything ! I'd sure would want to watch it ! :)
Thank you for such informative Video...could you please make a video on Growth Ratio ie ROE x RR
Thanks for the kind words and the suggestion. Let me see if there's a story in there....
Real good one , thank you
Happy to hear that!!!
Thank you so much 🙌🏻
Any time! Happy to help. Here's a recent case study I did that can help you interpret DuPont ratios: ua-cam.com/video/A8Pprbx2uQ8/v-deo.html
@ thank you! 🙏🏼
Thank you for sharing
Thanks for watching! 😉
Thanks for this video!
You're welcome!
Amazing explanation!
Thank you! Here's the companion video applying the DuPont analysis to Apple's financial statements: ua-cam.com/video/DQgEoz8izxY/v-deo.html
I smell Dutch. Great video btw
Jazeker! 😎🇳🇱 Nog meer nuttige video's met o.a. voorbeelden van hoe je ROA vergelijkingen tussen bedrijven doet in deze afspeellijst: ua-cam.com/video/2j8bfR8KqJ0/v-deo.html&pp=gAQBiAQB
Great video mate - thanks
Thank you, James! I have made a follow-up video to illustrate the Return On Assets formula with numbers, hope you like that one as well! ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
Thank-you Sir! I really appreciate the detail and I also got the trivia question right!
You're welcome, Joslyn! I really like the topic, and have made a few more videos with examples or more in depth discussion of parts of the DuPont equation. Here are two suggestions of follow-up videos to watch: a real-life example of calculating and comparing Return On Assets ua-cam.com/video/2j8bfR8KqJ0/v-deo.html and a video covering financial leverage ua-cam.com/video/GESzfA9odgE/v-deo.html
Great explanation 5hank you
You're welcome! I have a few illustrations of the concepts in the following DuPont analysis playlist: ua-cam.com/video/bhbDDSohJ84/v-deo.html
Hey, may I please know why the formula, Assets / equity, is used for financial leverage instead of Debt / Equity
Good question! The reason for that is that the core calculation is Return On Equity (ROE) = Net Income / Equity. The beauty of the DuPont equation in its 3-step or its 5-step version is that the final outcome of the calculation is the same as ROE. Net Income / Sales times Sales / Assets times Assets / Equity equals Net Income / Equity as both Sales and Assets are in the numerator once and in the denominator once and therefore "cancelled out" in total. Does that make sense?
@@TheFinanceStoryteller ohhh. Yea that makes sense. Thank you so much for the quick and concise reply!!! This is why I love your channel so much!
You're welcome! Please subscribe, and spread the word to friends and colleagues. :-)
Perfect 👌 explanation..
Thank you, Rakesh! :-) Here's a video showing how to apply it to a company's actual financial results: ua-cam.com/video/DQgEoz8izxY/v-deo.html
Brilliant vid, thanks man!!!!
You're welcome! Good to hear you liked it.
hello, how do you identify if your dupont is high or low?
Hello Paolo! Take a look at my case studies calculating ROA and ROE for real world companies, and you will get a feel for it:
ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
ua-cam.com/video/DQgEoz8izxY/v-deo.html
excellent-thank you!
Glad it was helpful! Here's a playlist with some definitions of related ratios and some examples: ua-cam.com/video/W5CrcMSBARU/v-deo.html
Thanks sir.
very clear - thank you
You´re welcome! Here´s a follow-up video applying DuPont analysis to Apple Inc's 2017 financial statements: ua-cam.com/video/DQgEoz8izxY/v-deo.html
I get it now, thank you
You're welcome! Happy to hear that. More examples in this playlist: ua-cam.com/video/bhbDDSohJ84/v-deo.html
Clear explanation. Revising for financial analysis exam and you are making my nights easier. Btw are you from Holland ? Accent sounds familiar. Thank you ! :D
Thank you, Elio! Yes, you guessed right on the accent. :-) Please spread the word!
Thank you so much.
You're welcome!
I learn there's slightly different when i learned about roa and roe. In the formula that i learned it used average total asset and average shareholder's equity. But it is different in this video. Can someone explain to me because I'm confuse.
Using average assets and average equity is even more sophisticated than what I explain here. Next step is to take a 5-point average (start of the year, plus 4 quarter-ends) to get even more detailed. It doesn't change the concept itself though....
@@TheFinanceStoryteller I see. Thank you for explaining
Why do most companies have a financial leverage in roe formula?
Hello Edward! Interest rates are very low, so debt/borrowing is a very cheap source of financing. The higher the financial leverage, the higher the ROE can become, but at the same time the higher the risk of bankruptcy if the company for whatever reason gets into some turbulence.... See also my video on financial leverage for a numerical example: ua-cam.com/video/GESzfA9odgE/v-deo.html
It's easy to understand.
Thank you! Good to hear. I have made a follow-up video with numbers to illustrate Return On Assets, see ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
what is EBIT?
Earnings Before Interest and Taxes, see also: ua-cam.com/video/nImp51zYcy4/v-deo.html
are you ready for more excitement
Wait till you see my example of how to calculate ROA (which is a subset of ROE): ua-cam.com/video/2j8bfR8KqJ0/v-deo.html
Totally makes sense
Thank you very much! :-)
So how is ROE affected by the various factors
Hello Michael! I have recently made a follow-up video zooming in on the financial leverage aspect of the DuPont analysis ROE formula: ua-cam.com/video/GESzfA9odgE/v-deo.html
Both my ROE explained video ua-cam.com/video/6fA5N4giHrM/v-deo.html and my ROA explained video ua-cam.com/video/W5CrcMSBARU/v-deo.html have some practical examples of improving ROE. Let me know if these answer your question!
love!
Thanks!
thank you!
You're welcome! :-)
thanks
You're welcome!
There's hindi sub too
am an Engineer, doing Accounting now in one of my modules. Let me take off my jacket
Welcome! Be aware that accounting is an art as well as a science. Context and interpretation are very important. I have met many engineers that struggle with that. If I may suggest, have a look at a few of the videos in my Accounting 101 playlist ua-cam.com/video/b93KBmcXanI/v-deo.html&pp=gAQB , that should get you off to a good start! Feel free to ask questions in the comment section of any of the videos! Happy to help.
Have you seen Dark Water?
No, I haven't. Would you recommend it?
The Finance Storyteller *highly recommended* it’s all based on DuPont as well. Will give your whole video a new light!
1920
Correct!
I don't think you explained how to apply the formula
Here's an example using real world numbers: ua-cam.com/video/DQgEoz8izxY/v-deo.html