This PPT slide, part of the 407-slide Complete Business Frameworks Reference Guide PowerPoint presentation, presents a financial ratio analysis using the Dupont Tree, also referred to as the RONA model. This model serves as a structured approach to dissect and visualize key financial metrics. At the top, it emphasizes 3 primary levers: Margin, Costs, and Asset Base. Each lever plays a crucial role in determining overall financial performance.

The Margin lever focuses on gross sales and total turnover, illustrating how sales figures impact profitability. It highlights the importance of managing costs effectively, which is represented in the Costs section. Here, various cost components, such as raw materials, maintenance, and other operating costs, are detailed. This breakdown allows for a clearer understanding of how operational efficiency can be improved.

The Asset Base lever is essential for understanding how assets contribute to financial outcomes. It includes tangible assets, working capital, and other financial elements that affect the return on net assets (RONA). The flowchart format guides the viewer through the relationships between these components, ultimately leading to shareholder value.

The right side of the slide connects the RONA model to shareholder value, emphasizing the end goal of financial performance analysis. This visual representation not only aids in comprehension, but also serves as a strategic tool for decision-making. By utilizing this model, executives can identify areas for improvement and prioritize initiatives that enhance financial health. The Dupont Tree is a powerful framework for any organization looking to deepen its financial insights and drive performance.

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Consulting Frameworks Strategy Frameworks Consulting Training Gap Analysis Shareholder Value Financial Ratio Analysis Sales