Stock Analysis on Net
Stock Analysis on Net

Amgen Inc. (NASDAQ:AMGN)

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

Amgen Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 107.78% = 6.91% × 15.59
Dec 31, 2022 178.97% = 10.06% × 17.79
Dec 31, 2021 87.96% = 9.63% × 9.13
Dec 31, 2020 77.20% = 11.54% × 6.69
Dec 31, 2019 81.07% = 13.13% × 6.17

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Amgen Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 107.78% = 24.96% × 0.28 × 15.59
Dec 31, 2022 178.97% = 26.42% × 0.38 × 17.79
Dec 31, 2021 87.96% = 24.25% × 0.40 × 9.13
Dec 31, 2020 77.20% = 29.97% × 0.39 × 6.69
Dec 31, 2019 81.07% = 35.32% × 0.37 × 6.17

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

Amgen Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 107.78% = 0.86 × 0.73 × 39.87% × 0.28 × 15.59
Dec 31, 2022 178.97% = 0.89 × 0.84 × 35.29% × 0.38 × 17.79
Dec 31, 2021 87.96% = 0.88 × 0.85 × 32.51% × 0.40 × 9.13
Dec 31, 2020 77.20% = 0.89 × 0.87 × 38.76% × 0.39 × 6.69
Dec 31, 2019 81.07% = 0.86 × 0.88 × 46.96% × 0.37 × 6.17

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

Amgen Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 6.91% = 24.96% × 0.28
Dec 31, 2022 10.06% = 26.42% × 0.38
Dec 31, 2021 9.63% = 24.25% × 0.40
Dec 31, 2020 11.54% = 29.97% × 0.39
Dec 31, 2019 13.13% = 35.32% × 0.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in asset turnover ratio.

Four-Component Disaggregation of ROA

Amgen Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2023 6.91% = 0.86 × 0.73 × 39.87% × 0.28
Dec 31, 2022 10.06% = 0.89 × 0.84 × 35.29% × 0.38
Dec 31, 2021 9.63% = 0.88 × 0.85 × 32.51% × 0.40
Dec 31, 2020 11.54% = 0.89 × 0.87 × 38.76% × 0.39
Dec 31, 2019 13.13% = 0.86 × 0.88 × 46.96% × 0.37

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Amgen Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2023 24.96% = 0.86 × 0.73 × 39.87%
Dec 31, 2022 26.42% = 0.89 × 0.84 × 35.29%
Dec 31, 2021 24.25% = 0.88 × 0.85 × 32.51%
Dec 31, 2020 29.97% = 0.89 × 0.87 × 38.76%
Dec 31, 2019 35.32% = 0.86 × 0.88 × 46.96%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in effect of interest expense measured by interest burden ratio.