Assessing And Evaluating Financial Performance Of Textile Companies Using Dupont Model: Evidence From Pakistan

Abstract

The purpose of this study is to analyze and evaluate the financial performance of textile enterprises that are engaged in Pakistan by using an improved version of the Dupont model. The rate of return on equity (ROE) is used as the primary metric for determining how well a company is doing financially within this framework. The return on equity is further broken down into its component elements in order to analyze how each of these factors affects ROE. These component parts include the net profit margin (NPM), the assets turnover (AT), and the equity multiplier (EM). NPM and EM have a large and positive impact on ROE, as shown by the findings of the study, which made use of multiple linear regression analysis; nevertheless, AT has a negative and insignificant effect on ROE of the 74 textile enterprises in Pakistan.