Evaluation and Analysis of NVIDIA's Financial Performance: Based on DuPont Analysis

Yisen Wang

doi:10.54097/rdwcwd50

Authors

Yisen Wang

DOI:

https://doi.org/10.54097/rdwcwd50

Keywords:

Return on Equity, DuPont Analysis, Financial Structure Optimization.

Abstract

This paper gives a clear review of NVIDIA Corporation’s financial performance using the DuPont analysis method, with Return on Equity (ROE) as the focus. ROE is broken down into three parts: net profit margin, asset turnover, and equity multiplier. The study looks at how each part affected NVIDIA’s results from fiscal year (FY) 2021 to 2024. The results show that NVIDIA had strong profits, especially in 2024, mainly because of big growth in its AI and data center businesses. Asset turnover stayed mostly the same, since the company has a capital-heavy business model. The equity multiplier showed that NVIDIA used a careful level of debt. Based on this, the paper suggests that NVIDIA could try to use its assets more efficiently and think about using a bit more debt to raise returns for shareholders. These findings help people better understand how NVIDIA is doing financially and what it might do in the future as a leading tech company.

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