As I mentioned in a previous article on the implementation of the new LAMBDA function in Excel, it was targeted (IMO) at commonly used but very complex Excel formulas and calculations. I became acquainted with one such formula while reading about it on LinkedIn in a discussion about accounting, which I have to admit is not one of my favorite subjects. Thus, I had never heard of the Dupont analysis formula. After reading about it, I thought it was a perfect candidate for the LAMBDA treatment. The details on how it was constructed and how it can be used can be found at:
wallstreetprep.com/knowledge/dupont-analysis-template/
There is the 3-point and the 5-point flavor of this calculation, and I chose the 5-point. The inputs used for this calculation can be viewed in the following figure.
So, to make a LAMBDA formula for this that can be entered as
=DuPontROE(B5,B6,B7,B8,B9,B10)
you would use define the following formula in Name Manager as DupontROE:
=LAMBDA(Assets,Equity,Sales,EBIT,EBT,Net_income,LET(Margin,EBIT/Sales,Turnover,Sales/Assets,Cost_Ratio,EBT/EBIT,Equity_Multiplier,Assets/Equity,Tax_effect_ratio,Net_income/EBT,Margin*Turnover*Cost_Ratio*Equity_Multiplier*Tax_effect_ratio))
This is just one example of what must be a lot of exciting Excel accounting formulas out there in the world, just waiting to be converted to a useful and easily useable Excel LAMBDA formula. If you are an Excel accounting guru, it is time to start doing this!
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