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Advisor(s)
Abstract(s)
Financial statements provide information that could explain the return on equity. The DuPont extended model identifies five key ratios/indicators that might explain the performance of a company – tax effect, interest burden, earnings before interest and taxes (EBIT) margin, assets turnover and financial leverage. This study aims to analyze the relevance of the tax effect on the “return on equity” (ROE) when compared with the other DuPont model factors. For the purpose of the study, we selected a sample based on listed companies from the stock markets of France, Germany, Portugal and Spain. The number of companies in the sample is 516. The Ordinary Least Square (OLS) method was used to determine the individual impact of each factor on the “return on equity”. According to our findings, the tax effect and the interest burden play the most important role in order to explain the return on equity.
Description
Keywords
Tax effect Return on equity DuPont model Stock markets
Citation
Ferreira, Liliana; Lopes, José; Nunes, Alcina (2019). The relevance of the tax effect compared with other dupont model factors in order to explain the “return on equity” (Listed Companies – France, Germany, Portugal and Spain). In 34th International Business Information Management Association Conference (IBIMA). Madrid. p. 8498-8507
Publisher
International Business Information Management Association (IBIMA)