Application of the DuPont model in the diagnostics of investment activities of canning industry enterprises

Abstract

The article provides the retrospective and prospective factor analysis in the diagnosis of investment activities of enterprises. The possibility of practical application of factor financial analysis of investment results of canning enterprises in Ukraine is considered according to the DuPont model in planning and forecasting the formation of cash flows in the management of cash flows from the implementation of socio-economic projects. It is outlined that the application of the DuPont model for the diagnosis of investment activity allows to assess in a timely manner the degree of impact on the results of investment activities of certain factors in three areas of the enterprise. The essence of building the basic three-factor model of DuPont is to determine the return on equity by capital structure and return on assets and the decomposition of these factors, which are themselves complex financial indicators, on return on sales and asset turnover. The purpose of building the model is to decompose the system of cash flows of the enterprise by areas of activity that generate them. The method of building a model is a balanced inclusion in the model of indicators that reflect the effectiveness of the three areas of the enterprise by taking into account all the links between these areas. Diagnosis of the decomposed factors that influence model indicators allows to define in detail the reasons of changes in this or that indicator. It is proved that the decomposition of the model to the system of one- and two-factor regression equations expands the possibilities of applying the method of analysis in the diagnosis of investment activity for forecasting and modeling the results of enterprises. In addition, a systematic approach to enterprise management requires the use of a systematic approach to cash flow management, performance analysis and planning for further development of the enterprise. It is emphasized that the integrated model of factor analysis DuPont can diagnose the company's ability to make a profit, invest, increase revenue and increase efficiency. Key words: sphere of activity, financial analysis, diagnostics, DuPont model, socio-economic project, cash flow.