Profitability analysis using the DUPONT model in freight transport companies in the Carchi province

Abstract

The goal of this research is to analyze the profitability of freight transport companies in the Carchi province in Ecuador during the period of 2013 to 2018 and compare it with the average of whole industry through a technical financial analysis, using The Dupont Model as a measurement tool. The quantitative type of this research has two scopes: exploratory and descriptive and its design is longitudinal with a sample type of not probabilistic. The multidimensional aggregate statistical information of the Servicio de Rentas Internas was taken into account for its financial analysis using the data from the 101 form related to the income tax declarations of the Companies legal stablished in the Carchi province. As a result, this research paper determine that the freight transport business sector in the Carchi province is not attractive to the investor. Although Carchi companies are more efficient in the use of their assets to generate income, there are still problems in managing the Net Profit Margin, so the Operating Performance on ROA Assets is 2.02% lower compared to the industry average that is 3.83%. In the last six years, the ROE has had a fluctuating trend. On the average, investors who invest 100 dollars gain a profit of $ 4.38 back, while the average in the industry the profit generated is $ 9.97.