Performance Analysis of Indian Information Technology Companies Using DuPont Model.

The net income of the organization is not enough to determine its efficiency and performance unless profit margin, asset turnover, financial leverage, etc. are taken into consideration. The present study examines whether Indian Information Technology (IT) companies are able to generate positive Return on Equity (ROE) for its shareholders and to ascertain improvement in ROE by using IT companies data for the period 2007-2016. The paper calculates ROE using three-factor DuPont model. Empirical analysis of the study shows that ROE is better in creating positive shareholder value, and it is also found that ROE can be improved by better asset turnover and profit margin. This paper suggests that further study can be conducted by using extended DuPont model. This enhanced study may strengthen the modern technique of performance measurement. [ABSTRACT FROM AUTHOR]