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A DuPont Analysis on Insurance Sector of South Asian Region

Author

Listed:
  • Raza, Syed Ali
  • Jawaid, Syed Tehseen
  • Adnan, Muhammad

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.

Suggested Citation

  • Raza, Syed Ali & Jawaid, Syed Tehseen & Adnan, Muhammad, 2013. "A DuPont Analysis on Insurance Sector of South Asian Region," MPRA Paper 49289, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:49289
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    References listed on IDEAS

    as
    1. Ghosh, Aloke & Jain, Prem C., 2000. "Financial leverage changes associated with corporate mergers," Journal of Corporate Finance, Elsevier, vol. 6(4), pages 377-402, December.
    2. Rajnish Mehra, 2006. "The Equity Premium in India," NBER Working Papers 12434, National Bureau of Economic Research, Inc.
    3. Syed ali, Raza & Syed tehseen, jawaid & Imtiaz, arif & Fahim, qazi, 2011. "Validity of capital asset pricing model: evidence from Karachi stock exchange," MPRA Paper 32737, University Library of Munich, Germany.
    4. Moss, Charles B. & Mishra, Ashok K. & Dedah, Cheikhna O., 2009. "Decomposing Agricultural Profitability Using DuPont Expansion and Theil’s Information Approach," 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin 49524, Agricultural and Applied Economics Association.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Net income; Profit Margin; Asset Turnover; Financial Leverage; DuPont technique.;
    All these keywords.

    JEL classification:

    • G2 - Financial Economics - - Financial Institutions and Services
    • G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies; Actuarial Studies

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