DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Book Value (P/BV) since 2005
- Aggregate Accruals
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Two-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Dec 1, 2023 | = | × | |||
| Dec 2, 2022 | = | × | |||
| Dec 3, 2021 | = | × | |||
| Nov 27, 2020 | = | × | |||
| Nov 29, 2019 | = | × | |||
| Nov 30, 2018 | = | × |
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.
Three-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Dec 1, 2023 | = | × | × | ||||
| Dec 2, 2022 | = | × | × | ||||
| Dec 3, 2021 | = | × | × | ||||
| Nov 27, 2020 | = | × | × | ||||
| Nov 29, 2019 | = | × | × | ||||
| Nov 30, 2018 | = | × | × |
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.
Five-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.
Two-Component Disaggregation of ROA
Adobe Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Dec 1, 2023 | = | × | |||
| Dec 2, 2022 | = | × | |||
| Dec 3, 2021 | = | × | |||
| Nov 27, 2020 | = | × | |||
| Nov 29, 2019 | = | × | |||
| Nov 30, 2018 | = | × |
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the increase in return on assets ratio (ROA) over 2023 year is the increase in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Adobe Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Dec 1, 2023 | = | × | × | × | |||||
| Dec 2, 2022 | = | × | × | × | |||||
| Dec 3, 2021 | = | × | × | × | |||||
| Nov 27, 2020 | = | × | × | × | |||||
| Nov 29, 2019 | = | × | × | × | |||||
| Nov 30, 2018 | = | × | × | × |
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the increase in return on assets ratio (ROA) over 2023 year is the increase in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Adobe Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Dec 1, 2023 | = | × | × | ||||
| Dec 2, 2022 | = | × | × | ||||
| Dec 3, 2021 | = | × | × | ||||
| Nov 27, 2020 | = | × | × | ||||
| Nov 29, 2019 | = | × | × | ||||
| Nov 30, 2018 | = | × | × |
Based on: 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), 10-K (reporting date: 2018-11-30).
The primary reason for the increase in net profit margin ratio over 2023 year is the increase in operating profitability measured by EBIT margin ratio.