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Swot Analysis : Financial Analysis

Decent Essays

Financial Analysis According to INVESTOPEDIA the definition of the DuPont analysis is that “assets are measured at their gross book value rather than at net book value in order to produce a higher return on equity (ROE)” (INVESTOPEDIA, 2003, pg.1). The DuPont analysis breaks down the return on equity into three parts. These three parts include: operating efficiency which would be measured by profit margin, assets and there use of efficiency which is measured by total asset turnover, and financial leverage which can be measured by equity multiplier (INVESTOPEDIA, 2003). The basic formula to measure the return on equity would be profit margin (profit/sales) X turnover (sales/assets) X equity multiplier (assets/equity). In September 2015 Church & Dwight had a return on equity of 20.16%. In June of 2015 Church & Dwight had a return on equity of 19.99%, and in March of 2015 Church & Dwight had a return on equity of 20.45% (YCharts, 2016). The growth potential of the company looks very promising according to their return on equity percentages. R&D Analysis “A company’s R&D intensity is a principal means of gaining market share in a global completion” (Wheelen, Hoffman, Hunger, and Bamford, 2015, pg. 144). Due to the fact that Church & Dwight are not as present in foreign countries as many other companies are, Church & Dwight does not have the R&D intensity as many other company’s they are competing against. With the majority of company sales concentrated in the United States

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