Pulling the Levers to Improve Profitability
From AgriMarketing Magazine - Wouldn’t operating an agribusiness be much easier if it were possible to simply pull a lever and improve profitability? Although not quite that effortless, the DuPont Financial Analysis Model is a rather straightforward method for assessing the factors that influence a firm’s financial performance. This model identifies three “levers” of profitability of the firm as measured by return on equity. These three levers are (1) margins or return on sales, (2) asset turnover and (3) financial leverage. More simply stated, these levers are “earns, turns, and leverage.” We will first introduce the model and then discuss each of these levers in this twopart series. The DuPont Analysis framework will be used specifically to demonstrate the critical role of marketing as a driver of profitability.
Categories: Agribusiness, Finance, Marketing
Tags: 2005, asset turnover, dupont model, financial leverage, josh detre, Margins, Marketing, michael boehlje, michael gunderson, profitability, return on sales
Tags: 2005, asset turnover, dupont model, financial leverage, josh detre, Margins, Marketing, michael boehlje, michael gunderson, profitability, return on sales
RELATED POSTS:
Optimizing Sales Management: Knowledge, Coaching and Continuous Improvement
While we used to think that exceptional salespeople possessed an innate gift, recent data suggests the impact of today’s sales managers in nurturing and refining this gift to unlock its fullest potential.
A great moment for value-based sales in agribusiness
Value-based sales can empower companies to craft compelling value propositions, understand the customer’s business model and effectively communicate to stakeholders.
How can big data empower the development of new products?
Data is one of the most powerful resources for a company. It enables accurate decision-making and minimizes risk, ensuring greater revenue and sustainable growth.