Analysis of Luckin Company Based on DuPont Analysis Framework

Abstract

This article conducts a comprehensive analysis of Luckin Coffee Company based on the DuPont analysis framework. The DuPont Analytical Framework is a method of measuring a company's performance and financial health by correlating four key indicators: net sales margin, total asset turnover, equity multiplier, and return on equity to assess a company's profitability and debt servicing ability. This article first introduces the industry overview and Luckin company overview. Next, the financial status and profitability of Luckin Coffee were analyzed through the four key indicators of the DuPont analysis framework. Then, combined with actual data, a specific analysis of factors affecting profitability and business strategies of Luckin Coffee Company was conducted. Finally, through the research of this article, it is found that Luckin Coffee Company has achieved good performance in terms of net sales profit margin and return on equity in 2022, but there is still room for improvement in capital structure. It is recommended that Luckin Coffee Company pays attention to market competition, industry development trends, business strategies, management capabilities and financial management to help Luckin Coffee increase profitability and improve financial status.