*Junior Research Fellow, Doctoral Research Scholar, Faculty of Management Studies, Mohanlal Sukhadia University, Udaipur, Rajasthan, India
**Professor, Faculty of Management Studies, Mohanlal Sukhadia University, Udaipur, Rajasthan, India
Online published on 23 September, 2014.
Banking sector constitutes a predominant component of the financial services industry and the performance of any economy, to a large extent, is dependent on the performance of banks. Profitability is the critical deciding factor in performance of the banks. This paper analyses the profitability of banks with the help of DuPont system of financial analysis. This model is applied to five major public sector banks in India. For the purpose of analysis financial and statistical tools (trend analysis, rate of growth, correlation and linear regression) have been used. The result of this study will allows us to perform an analysis of the components that affect profitability and make a comparison between two businesses and/or with the industry aggregate. And, second, it facilitates trend analysis which is useful for detecting the source of a shift in profitability and taking corrective action before it is too late.
Return on Equity, Du Pont Analysis, Asset Utilization, Net Profit, Equity multiplier
