[Verse 1]
When investors peek beneath the surface shine
ROE tells a story, but it's just one line
DuPont discovered secrets hiding there
Three puzzle pieces floating in the air
Net income divided by equity's face
But let's dissect this number, case by case
[Chorus]
Profit times turnover times the multiplier
PMT breakdown makes the truth much clearer
Profit Margin shows how much you keep
Times Asset Turnover, sales machinery deep
Times Equity Multiplier, leverage you employ
PMT - the trio that ROE can't destroy
[Verse 2]
First component: profit margin's tale
Net income over sales will never fail
For every dollar customers hand over
How many pennies does the firm recover?
Walmart's margins thin but volumes roar
While luxury brands charge so much more
[Chorus]
Profit times turnover times the multiplier
PMT breakdown makes the truth much clearer
Profit Margin shows how much you keep
Times Asset Turnover, sales machinery deep
Times Equity Multiplier, leverage you employ
PMT - the trio that ROE can't destroy
[Verse 3]
Asset turnover spins the revenue wheel
Sales over assets shows the grinding steel
How efficiently machines and buildings work
Transform to cash flow, never shirk
Grocery stores flip inventory fast
While steel mills' heavy assets built to last
[Bridge]
Equity multiplier reveals the debt
Assets over equity, the leverage bet
Conservative firms keep this number low
While aggressive players let the borrowing flow
One point five or five point oh
Each strategy has different paths to grow
[Chorus]
Profit times turnover times the multiplier
PMT breakdown makes the truth much clearer
Profit Margin shows how much you keep
Times Asset Turnover, sales machinery deep
Times Equity Multiplier, leverage you employ
PMT - the trio that ROE can't destroy
[Outro]
When ROE seems stellar, dig much deeper still
Which engine drives performance up the hill?
Pricing power, operational might
Or borrowed money amplifying sight?
DuPont reveals the truth behind
The numbers dancing in your mind