Predicting operational profitability using Dupont analysis: insurance companies listed in the Tehran stock market.

Document Type : Original Article

Authors

1 Associate Professor, Department of Accounting, Management and Accounting faculty, Islamic Azad University Tonekabon Branch, Tonekabon, Iran

2 Assistant Professor of Finance Department of Management and Accounting, Karaj Branch, Islamic Azad University, Karaj, Iran

Abstract

Predicting operational profitability using Dupont analysis: insurance companies listed to the Tehran stock market.

One of the important topics related to the stock exchange organization is predicting the future profitability of listed companies. Forecasting profitability is a very important issue that has focused the minds of financial analysts. Therefore, it is thought that the Dupont ratio, which includes the activity ratio and the profitability ratio, has a lot to do with predicting the future profitability of companies. Therefore, the purpose of this research is to predict operational profitability using Dupont analysis in insurance companies admitted to the Tehran stock market using regression models. The number of companies in the insurance industry in this research is fourteen companies for the period of 1394 -1399. The results of this research show that the future profitability of an insurance company is affected by changes in profit margins and performance management.

Keywords: operational profitability, Dupont analysis, insurance

Keywords

Main Subjects


Smiley face

کمالی وحیدی، آذرمیدخت؛ عربشاهی، معصومه؛ بهبودی، امید. (1401). رشد و توسعه عملکرد مالی و ارتباط با مشتری در صنعت بیمه از طریق تاکتیک‌های بازاریابی رابطه مند. اقتصاد پولی مالی, 29(بهار و تابستان 1401).
منتظری, زینب؛ کاویانی، میثم. (1397). بررسی قابلیت استفاده از نسبت دوپونت به منظور پیش‎بینی سودآوری و ﺑﺎﺯﺩﻩ سهام (مطالعه موردی: صنعت دارویی بورس تهران). چشم انداز حسابداری و مدیریت, 1(1), 77-89.
نوظهور، ندا؛ کاویانی، میثم. (1399). تحلیل رابطه بین نسبت‎های دوپونت و سیاست تقسیم سود (رهیافت تحلیل رگرسیون‎های توبیت و لجستیک). مدیریت نوآوری و راهبردهای عملیاتی, 1(2), 114-125.
 
Al-Khoury, A. B. E. E. R., Haddad, H., Al-Bawab, A. T. E. F., Othman, M., & Khazaleh, A. Financial Performance For Arab Bank Using Dupont Analysis 2000-2021.‏
Anderson, M., Hyun, S., Muslu, V., & Yu, D. (2023). Earnings prediction with DuPont components and calibration by life cycle. Review of Accounting Studies, 1-35.‏
Brooks, L. and Buckmaster, D. (1976), “Further evidence of the time series properties of accounting income”, Journal of Finance, Vol. 31 No. 5, pp. 1359-1373.
Fairfield, P.M. and Yohn, T.L. (2001), “Using asset turnover and profit margin to forecast changes in profitability”, Review of Accounting Studies, Vol. 6 No. 4, pp. 371-385.
Feltham, J. and Ohlson, J.A. (1995), “Valuation and clean surplus accounting for operating and financial activities”, Contemporary Accounting Research, Vol. 11 No. 2, pp. 689-731.
Freeman, R.N., Ohlson, J.A. and Penman, S.H. (1982), “Book rate-of-return and prediction of earnings changes: an empirical investigation”, Journal of Accounting Research, Vol. 20 No. 2, pp. 639-653.
Li, D. (2021). Analysis of Enterprise Profitability Based on Dupont Analysis Method-Taking China Life Insurance (Group) Company as an Example. In E3S Web of Conferences (Vol. 233, p. 01173). EDP Sciences.‏
Mohanasundari, M., Sundharesalingam, P., Raja, M. S. N., & Sivaprakash, M. V. (2020). Using Dupont Analysis to assess the Financial Performance of the Selected Companies in the Plastic Industry in India. Gedrag & Organisatie Review, 33(2), 2585-2605.‏
Ohlson, J.A. (1995), “Earnings, book values, and dividends in security valuation”, Contemporary Accounting Research, Vol. 11 No. 2, pp. 661-687.
Penman, S.H. and Zhang, X. (2006), “Modeling sustainable earnings and P/E ratios using financial statement information”, Working Paper, Columbia University and University of California, Berkeley. pp. 302-327.
Richardson, S., Sloan, R.G., Soliman, M. and Tuna, I. (2005), “Accrual reliability, earnings persistence and stock prices”, Journal of Accounting and Economics, Vol. 39 No. 3, pp. 437-485.
Sanny, A., & Yanti, E. D. (2019). Du Pont Analysis Integrative Approach to Ratio Analysis at PT. Federal International Finance. International Journal of Research & Review, 6(11).‏
Sloan, R.G. (1996), “Do stock prices fully reflect information in accruals and cash flows about future earnings?”, The Accounting Review, Vol. 71 No. 3, pp. 289-315.
Soliman, M.T. (2008), “The use of DuPont analysis by market participants”, The Accounting Review, Vol. 83 No. 3, pp. 823-853.