DuPont: drag net income
Drag the bar to set net income. Sales, assets and equity stay put, so turnover and the equity multiplier stay put. Only the net margin moves, and ROE moves with it. That is DuPont with two of the three pieces held still.
DuPont ROE
15.00%
Net income
$45,000
Turnover stays 0.625 and the multiplier stays 2.67. Only the margin moves with profit. Illustrative arithmetic, not a rating or advice.
Held still
Revenue $500,000, assets $800,000, equity $300,000.
In short
- Drag the bar up for more net income, a wider margin, and a higher ROE.
- Read the three pieces: margin, turnover, multiplier. The headline is their product.
- Watch turnover and the multiplier stay put. Only the margin is moving.
- Focus the handle and use the arrow keys to step profit.
Three pieces, one product
DuPont writes ROE as net margin times asset turnover times the equity multiplier. How DuPont analysis works is that identity, with the DuPont calculator under the answer.
This picture holds sales, assets and equity still so a drag only changes the margin. ROA is the first two pieces.
A high ROE is not a high margin
Turnover and the multiplier can carry a high ROE on a narrow margin. The ROA against ROE table is that split in one view. Ranking on ROE alone hides which piece did the work.
What is held still
Sales, assets and equity do not move here. A recapitalisation that cuts equity would raise the multiplier and raise ROE with no change in the margin. That move belongs on the leverage ratio explorer. This is educational material, not financial advice.
Common questions
Why can I not drag the multiplier?
This picture isolates the margin. Change the debt share on the leverage ratio explorer, then bring those assets and equity back here.
Does the product always match NI over equity?
Yes, when the four inputs are one period and one consolidation. Sales and assets cancel.
Is 15 percent a target ROE?
No. It is the teaching sheet. It is educational material, not advice.
Keep reading
This page is educational material, not financial advice. The figures come from the formula shown and assume the inputs you enter hold for the whole term. Your own rate, fees, taxes and timing will differ, so treat the output as arithmetic to check a decision against, not as a recommendation.