Stock Analysis on Net
Stock Analysis on Net

Adobe Inc. (NASDAQ:ADBE)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Adobe Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Nov 29, 2024 39.42% = 18.39% × 2.14
Dec 1, 2023 32.86% = 18.23% × 1.80
Dec 2, 2022 33.85% = 17.51% × 1.93
Dec 3, 2021 32.59% = 17.70% × 1.84
Nov 27, 2020 39.66% = 21.66% × 1.83
Nov 29, 2019 28.03% = 14.22% × 1.97

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.

Three-Component Disaggregation of ROE

Adobe Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Nov 29, 2024 39.42% = 25.85% × 0.71 × 2.14
Dec 1, 2023 32.86% = 27.97% × 0.65 × 1.80
Dec 2, 2022 33.85% = 27.01% × 0.65 × 1.93
Dec 3, 2021 32.59% = 30.55% × 0.58 × 1.84
Nov 27, 2020 39.66% = 40.88% × 0.53 × 1.83
Nov 29, 2019 28.03% = 26.42% × 0.54 × 1.97

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.

Five-Component Disaggregation of ROE

Adobe Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Nov 29, 2024 39.42% = 0.80 × 0.98 × 33.02% × 0.71 × 2.14
Dec 1, 2023 32.86% = 0.80 × 0.98 × 35.61% × 0.65 × 1.80
Dec 2, 2022 33.85% = 0.79 × 0.98 × 34.76% × 0.65 × 1.93
Dec 3, 2021 32.59% = 0.85 × 0.98 × 36.86% × 0.58 × 1.84
Nov 27, 2020 39.66% = 1.26 × 0.97 × 33.35% × 0.53 × 1.83
Nov 29, 2019 28.03% = 0.92 × 0.95 × 30.09% × 0.54 × 1.97

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.

Two-Component Disaggregation of ROA

Adobe Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Nov 29, 2024 18.39% = 25.85% × 0.71
Dec 1, 2023 18.23% = 27.97% × 0.65
Dec 2, 2022 17.51% = 27.01% × 0.65
Dec 3, 2021 17.70% = 30.55% × 0.58
Nov 27, 2020 21.66% = 40.88% × 0.53
Nov 29, 2019 14.22% = 26.42% × 0.54

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in asset turnover ratio.

Four-Component Disaggregation of ROA

Adobe Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Nov 29, 2024 18.39% = 0.80 × 0.98 × 33.02% × 0.71
Dec 1, 2023 18.23% = 0.80 × 0.98 × 35.61% × 0.65
Dec 2, 2022 17.51% = 0.79 × 0.98 × 34.76% × 0.65
Dec 3, 2021 17.70% = 0.85 × 0.98 × 36.86% × 0.58
Nov 27, 2020 21.66% = 1.26 × 0.97 × 33.35% × 0.53
Nov 29, 2019 14.22% = 0.92 × 0.95 × 30.09% × 0.54

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Adobe Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Nov 29, 2024 25.85% = 0.80 × 0.98 × 33.02%
Dec 1, 2023 27.97% = 0.80 × 0.98 × 35.61%
Dec 2, 2022 27.01% = 0.79 × 0.98 × 34.76%
Dec 3, 2021 30.55% = 0.85 × 0.98 × 36.86%
Nov 27, 2020 40.88% = 1.26 × 0.97 × 33.35%
Nov 29, 2019 26.42% = 0.92 × 0.95 × 30.09%

Based on: 10-K (reporting date: 2024-11-29), 10-K (reporting date: 2023-12-01), 10-K (reporting date: 2022-12-02), 10-K (reporting date: 2021-12-03), 10-K (reporting date: 2020-11-27), 10-K (reporting date: 2019-11-29).

The primary reason for the decrease in net profit margin ratio over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.