The DuPont formula is a powerful tool for analyzing return on equity (ROE). It breaks down ROE into 3 components: profit margin, asset turnover, and financial leverage. By understanding how these components interact, you can gain insights into a company's ROE.

![Image upload](https://cdn.commonstock.com/8f9dd91dcb8bd3dfd720b870fccd3fab53a4986dd9b87322ef377a44f1e0c38b-800x2000.png)

For a deeper look into using a Dupont analysis, check out this great article from my friends @stockopine

[PayPal - The Return on Equity Story](https://stockopine.substack.com/p/paypal-the-return-on-equity-story)
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Great visual Dave. Thank you for also sharing our article where we applied the DuPont analysis on **$PYPL** .

StockOpine

PayPal’s ROE using the 5-step DuPont analysis. Return on Equity measures the profitability that is generated for shareholders and is one of the fundamental ratios used by investors.

https://stockopine.substack.com/p/paypal-the-return-on-equity-story

PayPal - The Return on Equity Story

Dupont Formula Breaking Down Return on Equity

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