Abstract
This research paper aims to investigate the impact of different components of Du-Pont model on firms’ profitability (1) on stand-alone basis, and (2) in the presence of different macro-economic factors. These components include profit margin, total assets turnover and financial leverage. Financial information from five different sectors of Pakistan’s economy comprising of automobile, cement, fertilizer, oil and gas and power & distribution was collected for years ranging from FY2011 to FY2017. Few macro-economic factors such as Exchange Rates, GDP, Inflation, and Interest rates are also taken into consideration. In this paper, LS and GMM regression models have been implied on Du-Pont model (financial ratios) and the results indicate that profit margin is a major driver of profitability amongst all the other factors of Du-Pont across various economic sectors of economy of Pakistan. Hence, the business managers should exert more focus on adjusting the micro-economic factors, perhaps profitability, while adapting to macro-economic factors Keywords: Du-pont, Profitability, Pakistan, GMM, Leverage, Turnover, Sectors DOI : 10.7176/RJFA/10-10-16 Publication date :May 31 st 2019
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
