CI Market Dashboard

We have put together a collection of market indicators and track them to help you gauge the direction of the market.


CI Analysis Worksheets

Interactive analysis templates covering DuPont analysis (return on equity), valuing stocks the Warren Buffett way, and more to come.


CI Blog Feed

Bullish Sentiment Lowest in a Year
posted less than a minute ago by Wayne Thorp

Mt. Gox Likely to Begin Liquidation Process
posted 1 day ago by Wayne Thorp

Intel’s Profit Declines Again Yet Shares Rise–What’s In Store for PCs?
posted 1 day ago by Joe Lan

Today Only: Google Glass for Sale
posted 2 days ago by Wayne Thorp

Report: Amazon Preps Smartphone
posted 3 days ago by Wayne Thorp



Computerized Investing > First Quarter 2012

Deconstructing ROE: DuPont Analysis

PRINT | | | | COMMENTS (6) | A A   Reset

by Wayne A. Thorp, CFA

Investors use return on equity (ROE) to measure the earnings a company generates from its assets. With it, you can determine whether a firm is a profit-creator or a profit-burner and management’s profit-generating efficiency. Why is this important to investors? Companies that are good at coaxing profits from their operations tend to have competitive advantages, which can translate into superior investment returns.

In its simplest form, return on equity is calculated as follows:

...To continue reading this article you must be a Computerized Investing Subscriber.

Gain exclusive access to this article and all of the benefits and investment education a Computerized Investing subscription offers.

SUBSCRIBE TODAY for just $24.
Log in
Already a CI subscriber? Login to read the rest of this article.

Subscribe
A subscription to Computerized Investing includes a monthly email and access to the CI Website, all of which aim to benefit your investing skills with respect to computers and the Internet.