Implementation of Du Pont Model in Non-Financial Corporations
In this paper, the practical application of the dynamic decomposition of the return on equity is used on the basis of the ratio indicators. These indicators are determined according to the absolute items taken from the Register of Financial Statements of the Slovak Republic and are obtained for...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
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University of Montenegro - Faculty of Economics Podgorica
2018-06-01
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| Series: | Montenegrin Journal of Economics |
| Subjects: | |
| Online Access: | http://www.mnje.com/sites/mnje.com/files/131-141_-_jencova__litavcova_and_vasanicova.pdf |
| _version_ | 1818231678871535616 |
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| author | Sylvia Jencova Eva Litavcova Petra Vasanicova |
| author_facet | Sylvia Jencova Eva Litavcova Petra Vasanicova |
| author_sort | Sylvia Jencova |
| collection | DOAJ |
| description | In this paper, the practical application of the dynamic decomposition
of the return on equity is used on the basis of the ratio indicators.
These indicators are determined according to the absolute
items taken from the Register of Financial Statements of the Slovak
Republic and are obtained for individual non-financial corporations
according to SK NACE 26 and SK NACE 27 for the period 2013-
2016. Du Pont decomposition of the return on equity allowed quantifying
the impact of the financial indicators such as return on sales,
total assets turnover ratio, financial leverage, and interest and tax
profit reduction, which were linked by a multiplicative product interaction.
Quantification of the factors impact was applied to a sample
of 138 non-financial corporations using the equations valid for the
application of the functional method. By applying the exploration
data analysis, the impact of the factors is plotted graphically. The
box plot shows that the obtained values are very varied and it follows
that no clear conclusion can be deduced. There is potential for
further exploration of the dynamic model. |
| first_indexed | 2024-12-12T10:54:13Z |
| format | Article |
| id | doaj.art-6c8631373a0e42b8b221fc0481888ec6 |
| institution | Directory Open Access Journal |
| issn | 1800-5845 1800-6698 |
| language | English |
| last_indexed | 2024-12-12T10:54:13Z |
| publishDate | 2018-06-01 |
| publisher | University of Montenegro - Faculty of Economics Podgorica |
| record_format | Article |
| series | Montenegrin Journal of Economics |
| spelling | doaj.art-6c8631373a0e42b8b221fc0481888ec62022-12-22T00:26:42ZengUniversity of Montenegro - Faculty of Economics PodgoricaMontenegrin Journal of Economics1800-58451800-66982018-06-0114213114110.14254/1800-5845/2018.14-2.8Implementation of Du Pont Model in Non-Financial CorporationsSylvia JencovaEva LitavcovaPetra VasanicovaIn this paper, the practical application of the dynamic decomposition of the return on equity is used on the basis of the ratio indicators. These indicators are determined according to the absolute items taken from the Register of Financial Statements of the Slovak Republic and are obtained for individual non-financial corporations according to SK NACE 26 and SK NACE 27 for the period 2013- 2016. Du Pont decomposition of the return on equity allowed quantifying the impact of the financial indicators such as return on sales, total assets turnover ratio, financial leverage, and interest and tax profit reduction, which were linked by a multiplicative product interaction. Quantification of the factors impact was applied to a sample of 138 non-financial corporations using the equations valid for the application of the functional method. By applying the exploration data analysis, the impact of the factors is plotted graphically. The box plot shows that the obtained values are very varied and it follows that no clear conclusion can be deduced. There is potential for further exploration of the dynamic model.http://www.mnje.com/sites/mnje.com/files/131-141_-_jencova__litavcova_and_vasanicova.pdfDu Pontmodelprofitabilityreturn on equitycorporation. |
| spellingShingle | Sylvia Jencova Eva Litavcova Petra Vasanicova Implementation of Du Pont Model in Non-Financial Corporations Montenegrin Journal of Economics Du Pont model profitability return on equity corporation. |
| title | Implementation of Du Pont Model in Non-Financial Corporations |
| title_full | Implementation of Du Pont Model in Non-Financial Corporations |
| title_fullStr | Implementation of Du Pont Model in Non-Financial Corporations |
| title_full_unstemmed | Implementation of Du Pont Model in Non-Financial Corporations |
| title_short | Implementation of Du Pont Model in Non-Financial Corporations |
| title_sort | implementation of du pont model in non financial corporations |
| topic | Du Pont model profitability return on equity corporation. |
| url | http://www.mnje.com/sites/mnje.com/files/131-141_-_jencova__litavcova_and_vasanicova.pdf |
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