Evaluating Financial Performance & Business Strategies with Dupont Analysis (Special Focus on the Capital Goods Industry)

Abstract

The Modern-Day Accountant or a Finance Manager is expected to be a Team Player and a Principal Advisor to the Top Management. Finance Professionals need to be well equipped with various techniques of Business Analysis. Similar to a Medial Practitioner, he should be updated with latest Diagnostic Tools to find out the problems and their root causes. This article guides the Professional Mangers to understand The Basics of Business, The Business Cycle, Various Factors of Success and The Role of a Business Strategy. It also provides an insight into the Tools Available for evaluation of Business Performance. Simple explanations have been given to make the readers understand the underlying objectives of Financial Statement Analysis. Special Focus is given to understand the concept of Return on Equity (ROE) and its Contributors. Readers would also get to know about the Novel Approach to calculation of ROE, which will help them to determine the effectiveness of Business Strategies. This will guide the Managers and the Leaders in proper Planning, Organizing, Staffing, Directing, Controlling, Reporting and Budgeting for the Organizational Success by providing updated Vision and Business Strategies.

Data analysis for selected Capital Goods Companies and some PSUs has been presented herewith for greater insights.