Groundlearn / Glossary / DuPont analysis
DuPont analysis
A CFA term, defined in plain English with the distinction examiners test.
What it means
Decomposing ROE into its drivers — profitability, efficiency and leverage — to identify what is actually moving it.
Where it appears in the syllabus
- Financial Statement AnalysisCFA Level I · exam weight 11–14% · The three statements, inventories, long-lived assets, quality of earnings.
Related terms
- Accrual accountingRecognising revenue when it is earned and expenses when they are incurred, regardless of when cash moves.
- Balance sheetA statement of what a company owns and owes at a single point in time.
- Book valueThe accounting value of equity: assets less liabilities as reported.
- Cash conversion cycleThe time between paying for inventory and collecting cash from the customer.
- Cash flow from operationsCash generated by the core business, before investment and financing.
- Current ratioCurrent assets divided by current liabilities, a rough test of short-term solvency.
Educational content only. This is not financial, investment, legal or regulatory advice. Check the official curriculum for your own exam before relying on any definition here.
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