EVALUATING PROFITABILITY PERFORMANCE OF TATA POWER & ADANI POWER BY USING DUPONT MODEL

Abstract

This study attempts to measure the financial performance of Power companies in India with respect to Tata Power and Adani Power. In this paper, researcher uses DuPont analysis. DuPont analysis is based on analysis of Return on Equity (ROE) & Return on Investment (ROI). DuPont analysis (ROI and ROE) is an important tool for judging the operating financial performance. It is an indication of the earning power of the firm. The return on equity dis-aggregate performance into three components: Net Profit Margin, Total Asset Turnover, and the Equity Multiplier. The return on investment consists of Assets Turnover (Operating Income×Total Assets) and Profit Margin (EBIT×Operating Income). The researcher used‘t’ test for analyzing and comparing previous 10 years financial data to find out level of significant change.