define the DuPont financial analysis system as a practical financial analysis system. Starting from the most comprehensive and representative indicator for evaluating enterprise performance-return on net assets, the financial status and economic benefits of an enterprise are comprehensively and systematically analyzed and evaluated by using the internal organic relations among the main financial ratio indicators. Source The DuPont Financial Analysis System is named after the initiative of DuPont Company in the United States. Using DuPont financial analysis system, with ROE as the leader and ROE and equity multiplier as the core, this paper focuses on revealing the influence of enterprise profitability and equity multiplier on ROE, as well as the interaction between related indicators. It is decomposed into the use of the most basic production factors, the composition of costs and expenses and enterprise risks, which meets the needs of operators to evaluate their performance through financial analysis, and can find out the reasons and correct them in time when the business objectives change. Several main formulas of DuPont's financial analysis system are: return on net assets = net profit rate of sales? Asset turnover rate? Equity multiplier return on net assets = net profit/net assets; Return on net assets = equity multiplier? Net interest rate of assets; Equity multiplier = 1/(1- asset-liability ratio); Asset-liability ratio = total liabilities/total assets; Net interest rate of assets = net interest rate of sales? Asset turnover rate; Net profit rate of sales = net profit/sales revenue; Asset turnover rate = sales revenue/average total assets. The main points of DuPont's analysis: First, the return on equity is a comprehensive investment return index, and the decisive factors are mainly the net interest rate of assets and the equity multiplier. Secondly, the net interest rate of assets is the key index that affects the return on net assets. Comparing the net profit of an enterprise with the assets of an enterprise in a certain period shows the comprehensive effect of the enterprise's asset utilization. Thirdly, the equity multiplier indicates the degree of corporate debt, which is affected by the asset-liability ratio. The higher the degree of debt, the greater the debt ratio and the higher the equity multiplier, which means that the enterprise has a higher degree of debt, which brings more leverage benefits and more risks to the enterprise. Case: In 1998, the equity multiplier of Shanghai Automobile was 1.2 lower than that of FAW Jinbei's 2.8_9, the net profit rate of sales was .36 slightly higher than that of FAW Jinbei's .11, and the capital turnover rate was .4 higher than that of FAW Jinbei's .62. As a result, the ROE of Shanghai Automobile and FAW Jinbei was .172% slightly lower than that of FAW Jinbei's .197%. In 1996, the ROE of Shanghai Automobile and FAW Jinbei were .61% and .3% respectively Through the analysis, we can see that the change of ROE of Shanghai Automobile is the result of both the change of capital structure (equity multiplier) and the change of asset utilization effect (net asset interest rate). The change of ROE of FAW Jinbei is mainly caused by the change of net asset interest rate, because its equity multiplier is relatively unchanged. The case shows that the return on net assets reflects the return on investment of the company's owner's equity, which is very comprehensive. The factors that determine the rate of return on net assets are equity multiplier, net profit rate of sales and capital turnover rate. These three ratios reflect the debt ratio, profitability ratio and asset management ratio of an enterprise respectively, so the profitability it reflects is the result of the comprehensive action of many factors such as enterprise management ability, financial decision-making and financing mode. In this way, after the index decomposition, the reasons for the rise and fall of a comprehensive index such as the return on net assets can be concretized, and the problems existing in enterprise management can be quantitatively explained, which can provide more clear and valuable information than an index.