Du Pont Identity is an expression which breaks ROE (Return on Equity) into three parts.

Operating Efficiency (Measured by Profit Margin)

Asset Use Efficiency (Measured by Asset Turnover)

Financial Leverage (Measured by Equity Multiplier)

ROE = (Net Profit/Sales) * (Sales/Assets)*(Assets/Equity)

    =  Profit Margin  *  Asset Turnover * Equity Multiplier