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DuPont scheme
The big picture
The DuPont scheme can be used to illustrate the impact that different factors have on important financial performance indicators, such as the return on capital employed (ROCE), the return on assets (ROA) or the return on equity (ROE). While these ratios can be calculated using a simple formula, the model provides more insight into the underlying elements that make up the ratios. It is similar to sensitivity analysis, in the sense that the model makes it possible to predict the effect of variability in one or more input variables. The tool is well known in purchasing management, as it shows the tremendous impact ...
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