A DuPont Analysis on Insurance Sector of South Asian Region

Raza, Syed Ali and Jawaid, Syed Tehseen and Adnan, Muhammad (2013): A DuPont Analysis on Insurance Sector of South Asian Region.

Abstract

This research is to examine that most of the time investors do not prefer to highly profitable companies. We investigate the DuPont equation on insurance sector of South Asian region. Through DuPont analysis we see which types of companies are most fruitful for investor. We are using two method of ranking, first one is base on profit (Net income) and second one is base on DuPont equation. After that we see impact of independent variables (Return on asset & financial leverage) on dependent variable (return on equity) by regression analysis. The result shows that the ranking according to DuPont method are more reliable for investors as compare to profit (net income). The finding of this paper is that investor should work on effort method as judge against to effect method.

• Item Type: MPRA Paper
• Language: English
• Keywords: Net income, Profit Margin, Asset Turnover, Financial Leverage, DuPont technique.
• Subjects: G - Financial Economics > G2 - Financial Institutions and Services; G - Financial Economics > G2 - Financial Institutions and Services > G22 - Insurance ; Insurance Companies ; Actuarial Studies

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