Pratique du Shadowing: DuPont analysis explained - Apprendre l'anglais à l'oral avec la vidéo
Création de la leçon...
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Return on Equity, ROA Return on Assets, ROS Return on Sales.
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This video takes you through the financial ratios of the ROE formula, the ROA formula, the ROS formula, asset turnover and leverage, and shows how they fit together.
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The very basics and the very essence of financial ratio analysis.
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The beauty of financial ratios is that they link together information from two of the three main financial statements, the income statement or profit and loss statement, and the balance sheet.
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This gives you a more holistic view of a company's performance than merely looking at one financial statement in isolation.
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ROE, or Return on Equity, is defined as net income divided by equity.
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In other words, the net profit that the company has generated during a year, divided by the book value of the shareholder capital invested in the company.
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ROE is a measure of the rate of return to shareholders.
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For return on equity, at first sight you would say, the higher this ratio is, the better.
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The return on equity financial ratio becomes more meaningful when you dive into its drivers.
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What made the ROE go up or down versus prior year, if you look at the same company?
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Why is the ROE for two companies in different industries, or even in the same industry, different?
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This is where financial analysts owe a big thank you to the DuPont Corporation, for coming up with the idea of breaking ROE into three distinct elements.
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Let me walk you through these elements, ROS, Asset Turnover and Leverage, shortly.
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But first a trivia question.
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In which period did the DuPont Corporation start using the DuPont analysis?
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Was it the 1890s, the 1920s, the 1950s, or 1980s?
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When you are logged into YouTube and are watching this video from a computer, then please click the voting card on the top right to submit your vote.
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I will explain you first what the DuPont formula is, and then share the answer to the quiz question towards the end of the video.
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Here's the three-part version of the DuPont analysis.
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Mathematically, this split makes little sense, as you are multiplying fraction bars where the denominator in one of the fractions is the numerator in another fraction,
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hence they will cancel each other out when multiplied.
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For financial analysis, to split into three pieces makes a lot of sense.
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The first element, ROS or Return on Sales, is Net Income divided by Sales, which is an indicator of the relative profitability or operating efficiency.
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How many cents of profit are generated for every dollar of sales?
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The higher the ROS, the better.
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The second element is Asset Turnover, calculated as Sales divided by Assets, a measure of asset use efficiency.
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Can we maximize the amount of sales we generate with the assets that we have?
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A solid control of working capital is key here to decrease the denominator of assets.
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What are the terms you negotiate with your customers?
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Are you getting your customers to pay on time?
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Is your manufacturing and supply chain operation efficient, so the amount of inventory or stock along the way is minimized?
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All of those help to minimize the denominator.
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The first two elements together, ROS multiplied by Asset Turnover, form ROA .
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This ratio of ROA has many variations.
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Some companies measure ROIC , ROTC , ROCE or RONOA .
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These are all variations on the same theme.
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You look at the returns generated during a period, and compare them to the capital invested in the company to generate those returns.
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ROA is an indicator of business success, influenced by two factors, ROS or Margin Performance,
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and Asset Turnover, which you could call speed or velocity.
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The last element of the DuPont three-part equation is leverage, assets divided by equity.
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Whether they should be high or low is a much discussed question among business people, finance people, and academics, and I don't think there is a definitive answer.
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On the one side, if you can borrow money, take on debt, at low interest rates, and put this money to productive use, you could grow the company faster, and generate higher returns.
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On the other side, if debt is very high compared to the equity in the company, you could increase the risk profile, and decrease your buffer against bankruptcy.
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We have seen plenty of examples of companies that were too highly leveraged, going under in various financial crises over the years.
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Alright, that's the most commonly known three-step version of the DuPont formula.
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Are you ready for some more excitement?
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You can expand the DuPont formula to five steps if you want even more analytical insight
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into the drivers of where your ROE increase or decrease is coming from.
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The two elements on the right stay the same, asset turnover and leverage.
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However, ROS gets split into three elements.
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Net income divided by earnings before tax, which is called tax burden, earnings before tax divided by EBIT,
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called interest burden, and EBIT divided by sales, which is EBIT percentage.
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In a lot of companies, improving the EBIT percentage and increasing the asset turnover are important targets for the management team, whereas the other elements are for the finance,
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treasury and tax departments to manage.
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To close the loop on the DuPont formula, the answer to the trivia question is that this financial ratio analysis method came into use in the 1920s.
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It is still in ubiquitous use, and it can help you to understand the drivers of performance for your company.
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So thank you very much to Donaldson Brown of the DuPont Corporation!
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On the Finance Storyteller YouTube channel, you can find lots of well-researched videos explaining business, finance and accounting topics.
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Please subscribe to the Finance Storyteller channel, and take the time to like the video and comment below.
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On average, I post one new video per week.
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Vocabulaire et conseils d’expression pour cette leçon
Cette leçon d’expression orale de niveau C1 s’appuie sur la vidéo « DuPont analysis explained ». Les mots qui reviennent le plus souvent : asset, return, Dupont, financial, element. Cette vidéo contient 62 phrases et 996 mots à répéter en shadowing. La partie parlée dure 6:15. Le locuteur parle à un rythme naturel d’environ 160 mots par minute, proche d’une conversation courante. Seuls 78 % des mots font partie des 3 000 mots les plus courants en anglais, le vocabulaire est donc exigeant. 10 de ses 62 phrases sont des questions : un bon entraînement pour l’intonation interrogative et les réponses courtes.
Vocabulaire clé de cette vidéo
Les 15 mots les plus avancés de la vidéo, avec leur prononciation et leur sens :
| Mot | Prononciation | Sens |
|---|---|---|
| turnover nom | /ˈtɝnoʊvɚ/ | chiffre d'affaires |
| leverage nom | /ˈlɛv.(ə.)ɹɪd͡ʒ/ | effet de levier |
| denominator nom | /dɪˈnɒmɪneɪtə(ɹ)/ | dénominateur |
| multiply verbe | /ˈmʌltɪplaɪ/ | multiplier |
| fraction nom | /ˈfɹæk.ʃən/ | fraction |
| trivia nom | /ˈtɹɪvi.ə/ | bagatelles, fadaises |
| shareholder nom | /ˈʃɛəˌhəʊl.də(ɹ)/ | actionnaire |
| minimize verbe | /ˈmɪn.ɪˌmaɪz/ | minimiser |
| indicator nom | /ˈɪn.dɪˌkeɪ.tə(ɹ)/ | indicateur |
| subscribe verbe | /səbˈskɹaɪb/ | abonner, s'abonner |
| variation nom | /ˌvɛəɹiˈeɪʃn̩/ | variation |
| holistic adjectif | /hoʊˈlɪs.tɪk/ | holistique, holiste |
| mathematically adverbe | mathématiquement | |
| numerator nom | /ˈnuː.məɹˌeɪ̯.təɹ/ | numérateur |
| profitability nom | /ˌpɹɑ.fɪ.təˈbɪl.ɪ.ti/ | rentabilité |
Les verbes à particule que vous entendrez
| Mot | Sens |
|---|---|
| come up with verbe | inventer, imaginer |
| go up verbe | monter, s'élever |
Des phrases à répéter
Des phrases courtes et complètes de la vidéo, à réutiliser dans la conversation de tous les jours :
- What are the terms you negotiate with your customers?
- Are you getting your customers to pay on time?
- Are you ready for some more excitement?
La grammaire de cette vidéo
Les structures que le locuteur utilise le plus, avec les mots exacts de la vidéo :
| Structure | Dans la vidéo |
|---|---|
| Voix passive be + participe passé — l’accent est mis sur ce qui arrive, pas sur qui le fait | is defined · are logged · are generated |
| Propositions relatives who / which + proposition — une précision sur une personne ou une chose | Sales, which is · tax, which is |
| Present perfect have/has + participe passé — une action passée qui compte encore maintenant | has generated · have seen |
Prononciation à surveiller
- Les sons « sh » et « zh »: fraction /ˈfɹæk.ʃən/, shareholder /ˈʃɛəˌhəʊl.də(ɹ)/, variation /ˌvɛəɹiˈeɪʃn̩/, negotiate /nəˈɡəʊ.ʃi.eɪt/, isolation /ˌaɪsəˈleɪʃən/
- Mots longs — placez bien l’accent: denominator /dɪˈnɒmɪneɪtə(ɹ)/, indicator /ˈɪn.dɪˌkeɪ.tə(ɹ)/, numerator /ˈnuː.məɹˌeɪ̯.təɹ/, profitability /ˌpɹɑ.fɪ.təˈbɪl.ɪ.ti/, ubiquitous /juːˈbɪkwɪtəs/
Les sons difficiles pour les francophones :
- /h/ — il se souffle, il n’est pas muet: shareholder /ˈʃɛəˌhəʊl.də(ɹ)/, holistic /hoʊˈlɪs.tɪk/
- /r/ anglais — langue recourbée, sans frotter la gorge: leverage /ˈlɛv.(ə.)ɹɪd͡ʒ/, denominator /dɪˈnɒmɪneɪtə(ɹ)/, fraction /ˈfɹæk.ʃən/, trivia /ˈtɹɪvi.ə/, shareholder /ˈʃɛəˌhəʊl.də(ɹ)/
Comment s’entraîner avec cette vidéo
- Écoutez la vidéo en entier une fois sans parler et notez les mots que vous ne connaissez pas.
- Commencez à la vitesse 0,75×, répétez phrase par phrase, puis revenez à la vitesse normale quand cela devient facile.
- Enregistrez-vous et comparez avec l’original, en faisant attention à des mots comme turnover, leverage, denominator.
Qu'est-ce que la technique du Shadowing ?
Le Shadowing est une technique d'apprentissage des langues fondée sur la science, développée à l'origine pour la formation des interprètes professionnels. Le principe est simple mais puissant : vous écoutez de l'anglais natif et le répétez immédiatement à voix haute — comme une ombre suivant le locuteur avec un décalage de 1 à 2 secondes. Les recherches montrent une amélioration significative de la précision de la prononciation, de l'intonation, du rythme, des liaisons, de la compréhension orale et de la fluidité.