Limitations of the dupont financial index system and its improvement

Abstract

First, we explain the hierarchical structure and the main characteristics of the DuPont analysis system; then, we analyze the three major branches, the main financial indicators and their mutual relationship; at last, we analyze the shortcomings and defects of the traditional DuPont analysis system, and then put forward the new possibilities and suggestions from the aspects of financial indicators. Case analysis of Midea group in 2013 show that, the new DuPont financial indicators have a beneficial supplement to the traditional DuPont analysis system; it also has a more powerful financial analysis of the enterprise.