David Varela

DuPont Analysis

 

This project was done during my Intermediate Corporate Finance course at American University. This analyzes Capital One Financial Corporation and breaks down its return on equity into three parts to see how the company is performing according to profit margin, asset turnover ratio and its financial leverage.  By using this method, one can easily determine where does the company has to improve as the profit margin considers the pricing policies on its services, the asset turnover refers to the efficiency of its assets and the financial leverage to understand how effective the company's leverage is with its current operations. This break down is then compared to other companies in the same area of business, where you can easily determine where is the company lacking performance and then make recommendations on what Capital One Financial Corporation can do to improve its current overall performance.