 The DuPont analysis is a type of ratio analysis that allows us to drill down into return on equity to better understand what is driving the results. The basic DuPont formulas are return on assets times the equity multiplier equals return on equity. You can see the result from the examples in the return on assets equity multiplier and return on equity videos. So DuPont analysis allows us to analyze return on equity as a result of the company's assets and leverage. Finally, we can look even deeper with the DuPont formulas because return on sales times asset turnover equals return on assets. So DuPont analysis allows us to analyze return on equity as a result of company's sales, asset management and leverage policies.