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Successful farm business managers must understand the determinants of profitability and have an overall long‐term or strategic management focus. The objective of this research was to explore the use of an e‐learning tool to help producers understand the impacts of different production, pricing, cost control, and investment decisions on their farm’s financial performance. This objective was accomplished by developing and testing a computer‐based training and application tool to facilitate determination of the financial health of farm businesses using the DuPont profitability analysis model. The results of the two experiments indicate that the computer software was effective for teaching techniques of profitability analysis contained within the DuPont model.

The purpose of this study is to re-examine the relation between changes in profit margin (ΔPM) and changes in return on net operating assets (ΔRNOA) by partitioning on the direction of the change in PM. DuPont analysis provides a means of disaggregating a firm’s return on net operating assets (RNOA) into asset turnover (ATO) and profit margin (PM) components to gain insights into the underlying drivers of operating profitability. Prior research finds that changes in ATO are informative about one-year-ahead changes in RNOA, while changes in PM are not.

Consistent with prior research, regression analysis is used to develop a predictive model for one-year-ahead changes in RNOA. Results based on in-sample parameter estimates are used to examine the out-of-sample forecasting accuracy of alternative model specifications.

The results are consistent with significant forecast improvement resulting from considering the impact on future RNOA of the direction of the ΔPM.

The study contributes to the literature on the determinants of profitability ratios by providing further guidance on how financial statement information can be utilized to improve forecasts of firm performance.

A financial perspective of farmer cooperative performance is assumed by conceptualizing the cooperative as an independent firm. The purpose of this paper is to explore variability in the financial performance of the largest 1,000 US farmer cooperatives with emphasis on efficiency, productivity, and leverage.

Cooperative performance is analyzed by means of the extended DuPont identity, an accounting tool which decomposes return on equity into five ratios of efficiency, productivity, and leverage. The extended DuPont identity is applied empirically with quantile regression, which allows estimation of the statistical interrelationship of the DuPont components across the full response distribution.

Per the results, variability in the financial performance of US farmer cooperatives is for the most part associated with the operating profit margin, which confirms prior findings of cost inefficiency in the empirical literature. Therefore, US farmer cooperatives may improve financial performance by emphasizing sales and operating costs. Specifically, recommendations include placing emphasis on bargaining power, product differentiation, and scale economies. Supply cooperatives may also consider issuing non-qualified equity and securing long-term debt access as additional possibilities to improve financial performance.

The empirical application of the extended DuPont identity with quantile regression facilitates a novel investigation of cooperative performance by placing emphasis on the efficiency, productivity, and leverage of cooperatives with various degrees of performance.

This study aims to compare the financial performance of the tourism distribution sector between Portugal and Spain, regarding the years 2007 and 2017. It is also intended to determine which variables influence the performance of tourism intermediaries' enterprises.

This is a quantitative study based on financial information available on SABI database, with official data of Spanish and Portuguese enterprises. The final sample gathers 6095 intermediaries (1585 Portuguese and 4510 Spanish) which were analyzed regarding their profitability through DuPont model and an additional variable – size.

The return on equity (ROE) calculation in 2007 and 2017 identifies an increase of 12.8% for Portugal and 19.6% for Spain. Through Spearman's Rho, return on sales (ROS), asset turnover and return on asset (ROA) have a positive association with ROE, but the results about asset on equity and enterprise size did not reveal such precise evidence.

This study intends to reinforce the literature in terms of performance evaluation techniques to be used in this type of enterprises, applying DuPont model. At a practical level, besides aiming the maximization of the enterprise's profit, managers are faced with other financial challenges. Thus, this study provides important indications about aspects that should be considered to improve the enterprise's financial performance, supporting managers' decision making.

Financial studies focusing on the tourism distribution sector are limited. Even less frequent are studies with financial and official data from large samples, representative of the universe under study. The value of this study is based on these two aspects, allowing to strengthen the knowledge about tourism intermediaries and their financial performance, in a comparative approach between two countries.

This study aims to investigate the relations between long-window stock returns and prior years’ increases in DuPont identity components: profit margin and asset turnover. In particular, the authors examine the relative effectiveness of profit margin and asset turnover to predict years ahead stock returns.

To test the assertions, the authors regress raw, Capital Asset Pricing Model and Fama-French returns on controls and variables of interest, profit margin and asset turnover, lagged years t − 1, t − 2 and t − 3. To control for factors that could affect returns over the long windows, they also include returns lagged over years t − 1, t − 2 and t − 3 to coincide with the lagged profit margin and asset turnover variables of interest.

Results show a negative (positive) relation between returns and increases in lagged profit margin (asset turnover). However, the negative returns-profit margin relation is mitigated when increases in profit margin and asset turnover occur in the same lagged year.

This study adds to the existing body of research on the DuPont identity by temporally evaluating the relative long-run contributions of profit margin and asset turnover to firm value.

There is little reason a priori to expect that a cooperative firm’s capital needs are different from a non-cooperative firm’s needs if the two firms are otherwise similar in function and size and operate within similar market economies. However, the notion that cooperatives face capital constraints that investor-owned firms (IOFs) do not is a persistent theme in the literature. The paper aims to discuss these issues.

The authors revisit this hypothesis with an empirical examination of capital constraints in a panel data set of US agricultural supply and grain cooperatives and IOFs.

The findings are mixed. While the authors find little to suggest that cooperatives face financial constraints on borrowing in the short run, relative to IOFs, the authors do find some evidence that for long-term investments, a capital constraint may exist.

These short and long run differences have implications for the survival and growth of agricultural cooperatives. While in the short run, access to debt financing allows these firms to operative profitably, ultimately long-term large investments in technology and fixed assets will be required to maintain competitiveness in this industry.

This research investigates the top five pharmaceutical companies in India to determine whether their financial structures are sound and if they face the risk of bankruptcy, highlighting the potential contribution of intellectual capital (IC) to financial stability.

The analysis outlines operating ratios, profitability ratios, possibility of bankruptcy (through Z-scores) and attractiveness of the financial structure (through the F-score), with consequent focus on (IC).

The financial structure of the selected companies seems stable. Changes in the Indian pharmaceutical scenario, above all, regarding the patent system, will force the companies to consider the impact of IC carefully.

Indian pharmaceutical companies need sustainability and development, with increasing focus on patent issues. To enhance innovation capabilities and overcome international competition, they should redesign their business orientation towards IC, mainly when impacting patents.

Using established approaches for predicting potential bankruptcy, this study focuses on the financial performance of top Indian pharmaceutical companies. IC can support financial stability, and this study provides further perspectives for managing their financial structure, both statically and dynamically.

The purpose of this paper is to introduce the application of sustainable growth challenge (SGC) model in agricultural finance as a conceptual paradigm and then uses the model to measure sustainable growth rates for Illinois grain and livestock farmers. The SGC concept is used to understand the economic conditions and business decisions made by farmers in certain episodes of the time period analyzed.

A seemingly unrelated regression approach is used to analyze the interrelationships of the four levers of growth using a panel data of Illinois farm‐level financial and operating information. The second analysis flows from the first and examines aggregate US farm data to provide an historical perspective of changes in the SGC over time.

Econometric results indicate the relevance of the SGC model in explaining farm financial and operating decisions. The farms’ tendencies to attain balanced growth seem to be more influenced by asset productivity and leverage decisions, which are given different emphasis by grain and livestock farms due to differing operational structures and constraints. This study's estimation and analysis of the USA farm sector's actual and sustainable growth rates from 1981 to 2001 data generally show that the industry has adapted to positive or negative SGCs in a manner consistent with the model.

This paper explores the relevance of the SGC model as a business, policy and teaching tool for understanding issues surrounding farmers’ financial and operating decisions.

The purpose of this paper is to use the DuPont expansion to examine those factors underlying differences in (rates of) return on different crop portfolios over space (ten regions) and time (1960‐2004). The paper also estimates the impact of government payments on farmland values through its impact on farm profitability.

Businesses use the DuPont model to analyze the profitability of a business. This model includes three components: net profit margin, asset turnover, and financial leverage (or assets to equity). It is based on the relationships among these three components and is expressed as a product of ratios. For the purposes of the current study, accrued capital gains from (total) returns are excluded to focus on cash returns “cash flow”. Returns from current income are a “cash flow” available in the short run to pay financial obligations. Furthermore, returns from capital gains are not liquid; they are gains in wealth fully captured as capital gains/losses only in the longer term. Following the DuPont approach, the effect of government payments on farm asset values is equal to the sum of the effect of government payments on profit margins plus the effect of government payments on the asset turnover ratio.

The analysis focuses on agricultural profitability in the ten Economic Research Service (ERS) regions. By comparing the components of the DuPont expansion, profitability differences over time are analyzed. The results indicate that one cause of low profitability in the Corn Belt and Mountain regions is a perpetually low profit margin while the evidence for other regions supports lower asset efficiency. Results show that government payments impact the profit margin and affect value of farm assets in particular farmland values but not asset turnover ratio.

The use of DuPont expansion factor in agriculture is original and really helps us to understand the factors driving profitability in agriculture. Another innovation (originality) in this paper is the theoretical model that connects the DuPont expansion factor, government payments and its impact on farmland values.

The purpose of this paper is to investigate the informativeness of asset turnover (ATO) and profit margin (PM) of the DuPont analysis in explaining dividend policy.

Annual financial data from Compustat for the period 2004-2009 were used to analyze a sample of Malaysian firms.

This study finds both PM and ATO to strongly explain contemporaneous dividends. The decomposition of return on net operating assets (RNOA) into PM and ATO also improves the explanatory power of dividends. The results of the predictive model show that PM and ATO are useful in predicting the propensity of firms to pay dividends. The results of the change dividend model, however, do not provide any significant results for PM and ATO.

Understanding the influence of ATO and PM on dividends could enable managers to realize the importance of these factors when making dividend policy decisions. Other market participants, such as financial analysts and lenders, could also recognize the empirical specifics related to decomposing the profitability measure into its two components, one measuring the asset efficiency and the other measuring the profitability per unit of product, in the context of dividend policy.

This study extends the empirical specifics of prior dividend policy studies by decomposing the popular profitability measure of return on assets into its two components of PM and ATO.