Online published on 24 October, 2019.
This study attempts to measure the financial performance of the Auto-mobile companies in India with respect to Bajaj Auto Ltd and Hero Motocorp. In this paper, researcher uses DuPont analysis, is method of assessing a company's return on equity (ROE) breaking into three parts i.e. Profit Margin (Profit/Sales), Total Assets Turnover (Sales/Assets) and Equity Multiplier (Assets/Equity). In order to achieve the goal, this study has measured the ratios of ROE, ROA applying the DuPont analysis, which have been demonstrated with tables and graphs to show the change periodically. DuPont analysis is based on analysis of Return on Equity (ROE) & Return on Investment (ROI). DuPont analysis (ROI and ROE) is an important tool for judging the operating financial performance. It is an indication of the earning power of the firm. The return on equity dis-aggregate performance into three components: Net Profit Margin, Total Asset Turnover, and the Equity Multiplier. The return on investment consists of Assets Turnover (Operating Income×Total Assets) and Profit Margin (EBIT×Operating Income). The researcher used‘t’ test for analyzing and comparing previous 5 years financial data to find out level of significant change.
DuPont Analysis, Return on Equity, Return on Investment, Financial Performance
