Culinary science and hospitality research (한국조리학회지)

Culinary Society of Korean Academy (한국조리학회)
권호 표지

A Study of Financial Performance using DuPont Analysis in Food Distribution Market

  • Kim, Hak-Seon (School of Hospitality & Tourism Management, Kyungsung University)
  • Received : 2016.09.18
  • Accepted : 2016.09.28
  • Published : 2016.09.30
Download PDF
⟨ Previous Next ⟩

Abstract

This study attempts to measure the financial performance of the food distribution company. In order to achieve the goal, this study have measured the ratios of ROE, ROA applying the DuPont analysis, which have been demonstrated with tables to show the change periodically. DuPont analysis is based on analysis of Return on Equity (ROE) & Return on Investment (ROI). The return on equity disaggregate performance into three components: Net Profit Margin, Total Asset Turnover, and the Equity Multiplier. The return on investment consists of Assets Turnover (Operating Income${\times}$Total Assets) and Profit Margin (EBIT${\times}$Operating Income). From the study it if found that Hyundae Green Food's Financial performance is high followed by Foodmerce and then Dongwon home food and Lotte Food. The four companies are significant at their level. In conclusion, ROE & ROI is the most comprehensive measure of profitability of a firm. It considers the operating and investing decisions can be made as well as the financing and their leverage-related decisions.

Keywords

References

  1. Yim BJ, Lee SY (2015). An empirical study on the mutual influence between trade and economic growth in Korea. J Int Trade Commer 11(4):537-552.
  2. Yim HR, Kim HS (2016). The study of behavioral intention of environmental friendly agricultural products choice in consumer by using theory of planned behavior. J Foodservice Mgmt 19(1):201-221.
  3. Sohn JM, Kim HS (2014). A study on the foodservice quality of japanese restaurants using the importance-performance analysis (IPA). Korean J Cul Res 20(2):199-213.
  4. Kang SW (2008). Research on the evaluation of the differences in financial variables of chain restaurants using multivariate analysis of variance. Korean J Cul Res 14(1):21-38.
  5. Kwon WD (2000). Diversification of agricultural marketing channels and direction of the physical distribution centers. Kor J Food Marketing Econ 17(4):25-41.
  6. Kang SW, Ahn SG (2008). A study on the relationship between information on financial characteristics and profitability in the korean restaurant industry. Korean J Cul Res. 14(4):93-105.
  7. Osteryoung J, Constand R (1992). Financial ratios in large public and small private firms. Journal of Small Business Management July: 35-47.
  8. Liesz TJ, Maranville SJ (2008). Ratio analysis featuring the dupont method: an overlooked topic in the finance module of small business management and entrepreneurship courses. Small Business Institute Journal 1:17-34.
  9. Yang SP, Yoon DS (2005). The impacts of financial characteristics on profitability performances in food-service companies. J Foodservice Mgmt 8(1):273-293.
  10. Yang SP, Kim HI (2008). Financial ratios analyses of Korean food service companies subject to external audit. Korean J Tourism Res 23(2):321-343.
  11. Chong YK, Koo WI (2004). Using EVA to analyze the management performance of non-listed family restaurants. J of Tourism Sci 15(4):212-223.
  12. Chong YK, Koo WI, Park SS (2009). A study on the correlation between and operating performance co nfsiindaenrciniagl ratio the characteristics of foodservice companies. Korean J Cul Res 15(4):212-226.
  13. Choi KW, Park HJ, Shin SY, Yang IS (2007). Analysis of profitability and its affecting factors in restaurant franschise firms. Korean J Food Cookery Sci 23(2):270-279.
  14. Hawawini G, Viallet C (1999). Finance for Executives, South-Western College Publishing
  15. Choi SR, Choi KW (2012). A business risk tradeoff analysis of the degrees of operating and financial leverage on the restaurant firms of Korea. J Foodservice Mgmt 15(6):7-28.
  16. Financial Supervisory Service. http://dart.fss.or.kr
  17. Korea Listed Companies Association. Data Base of Company information (TS2000). http://kocoinfo.com/)