[Verse 1] Shareholders demand their golden slice But ROE alone won't tell you twice What machinery drives those profits home Three components built from corporate chrome Net income divided by equity's throne But smart analysts dig deeper, zone by zone [Chorus] Profit margin times turnover times the multiplier Three-part equation, financial amplifier Margin shows how much you squeeze from every sale Turnover reveals if assets tell their tale Multiplier unveils the leverage scale DuPont's triangle never fails [Verse 2] First ingredient: profit margin's bite Net income sliced by revenue's sight Operational excellence or pricing power This ratio blooms like a desert flower Cost control and markup strategies tower Management's skill in the crucial hour [Chorus] Profit margin times turnover times the multiplier Three-part equation, financial amplifier Margin shows how much you squeeze from every sale Turnover reveals if assets tell their tale Multiplier unveils the leverage scale DuPont's triangle never fails [Verse 3] Asset turnover spins the wheel around Sales divided by assets, efficiency found Inventory cycles, receivables race Fixed assets earning their warehouse space Velocity matters in the marketplace Every dollar's got to earn its place [Bridge] Equity multiplier completes the chain Total assets over equity's domain Leverage amplifies the shareholder game Higher ratios fuel a riskier flame Financial structure bears the frame Three parts dancing, none the same [Chorus] Profit margin times turnover times the multiplier Three-part equation, financial amplifier Margin shows how much you squeeze from every sale Turnover reveals if assets tell their tale Multiplier unveils the leverage scale DuPont's triangle never fails [Outro] When ROE disappoints or soars too high Decompose and ask the question why Which lever needs adjustment's cry DuPont analysis won't lie
← Efficiency Ratios: Asset and Working Capital Turnover | Trend Analysis and Common-Size Statements →