Budding Investor.

  Dupont Analysis.   There are lot of talks always circling about earnings in the market. This XYZ Company has reported earnings exceeding the consensus, share price up, share price down. But many a times investors forget that we live in a world where the quality of earnings is compromised. When we say many a times to our friends and family “I prefer quality over quantity”, we need to ask, do we apply that phrase in our investing as well? As an investor, I like to know from where my profits come from. For those who don’t know what Dupont Analysis is, I would try to put it in as easy way as possible. Equity is the capital that a company has which is its own money and not borrowed, to conduct its operating activities. And Return on Equity or ROE is the measure of the return or profit that the company gets on this company’s own capital. ROE is further divided into 3 components Net Profit Margin, Asset Turnover and Financial Leverage.Net Profit Margin the margin of profit,...