Stock Analysis on Net
Stock Analysis on Net

Cadence Design Systems Inc. (NASDAQ:CDNS)

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

Microsoft Excel

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

Two-Component Disaggregation of ROE

Cadence Design Systems Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2024 22.58% = 11.76% × 1.92
Sep 30, 2024 22.77% = 11.34% × 2.01
Jun 30, 2024 24.77% = 14.61% × 1.70
Mar 31, 2024 29.35% = 18.30% × 1.60
Dec 31, 2023 30.58% = 18.36% × 1.67
Sep 30, 2023 30.75% = 17.63% × 1.74
Jun 30, 2023 30.59% = 17.26% × 1.77
Mar 31, 2023 29.09% = 16.54% × 1.76
Dec 31, 2022 30.93% = 16.53% × 1.87
Oct 1, 2022 28.99% = 15.80% × 1.83
Jul 2, 2022 29.53% = 17.77% × 1.66
Apr 2, 2022 26.96% = 16.93% × 1.59
Dec 31, 2021 25.39% = 15.87% × 1.60
Oct 2, 2021 26.34% = 16.45% × 1.60
Jul 3, 2021 26.96% = 16.46% × 1.64
Apr 3, 2021 25.72% = 16.35% × 1.57
Dec 31, 2020 23.69% = 14.95% × 1.58
Sep 26, 2020 — = — × 1.73
Jun 27, 2020 — = — × 1.77
Mar 28, 2020 — = — × 1.75

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2024 is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

Cadence Design Systems Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 22.58% = 22.74% × 0.52 × 1.92
Sep 30, 2024 22.77% = 23.87% × 0.47 × 2.01
Jun 30, 2024 24.77% = 25.36% × 0.58 × 1.70
Mar 31, 2024 29.35% = 25.68% × 0.71 × 1.60
Dec 31, 2023 30.58% = 25.46% × 0.72 × 1.67
Sep 30, 2023 30.75% = 24.42% × 0.72 × 1.74
Jun 30, 2023 30.59% = 23.41% × 0.74 × 1.77
Mar 31, 2023 29.09% = 23.23% × 0.71 × 1.76
Dec 31, 2022 30.93% = 23.84% × 0.69 × 1.87
Oct 1, 2022 28.99% = 22.86% × 0.69 × 1.83
Jul 2, 2022 29.53% = 23.61% × 0.75 × 1.66
Apr 2, 2022 26.96% = 23.59% × 0.72 × 1.59
Dec 31, 2021 25.39% = 23.29% × 0.68 × 1.60
Oct 2, 2021 26.34% = 23.30% × 0.71 × 1.60
Jul 3, 2021 26.96% = 23.47% × 0.70 × 1.64
Apr 3, 2021 25.72% = 23.34% × 0.70 × 1.57
Dec 31, 2020 23.69% = 22.02% × 0.68 × 1.58
Sep 26, 2020 — = — × — × 1.73
Jun 27, 2020 — = — × — × 1.77
Mar 28, 2020 — = — × — × 1.75

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2024 is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Cadence Design Systems Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 22.58% = 0.76 × 0.95 × 31.71% × 0.52 × 1.92
Sep 30, 2024 22.77% = 0.79 × 0.96 × 31.61% × 0.47 × 2.01
Jun 30, 2024 24.77% = 0.82 × 0.97 × 31.90% × 0.58 × 1.70
Mar 31, 2024 29.35% = 0.82 × 0.97 × 32.03% × 0.71 × 1.60
Dec 31, 2023 30.58% = 0.81 × 0.97 × 32.23% × 0.72 × 1.67
Sep 30, 2023 30.75% = 0.85 × 0.97 × 29.75% × 0.72 × 1.74
Jun 30, 2023 30.59% = 0.82 × 0.97 × 29.35% × 0.74 × 1.77
Mar 31, 2023 29.09% = 0.81 × 0.97 × 29.47% × 0.71 × 1.76
Dec 31, 2022 30.93% = 0.81 × 0.98 × 29.99% × 0.69 × 1.87
Oct 1, 2022 28.99% = 0.76 × 0.98 × 30.48% × 0.69 × 1.83
Jul 2, 2022 29.53% = 0.80 × 0.98 × 29.91% × 0.75 × 1.66
Apr 2, 2022 26.96% = 0.85 × 0.98 × 28.31% × 0.72 × 1.59
Dec 31, 2021 25.39% = 0.91 × 0.98 × 26.28% × 0.68 × 1.60
Oct 2, 2021 26.34% = 0.91 × 0.98 × 26.16% × 0.71 × 1.60
Jul 3, 2021 26.96% = 0.92 × 0.98 × 26.16% × 0.70 × 1.64
Apr 3, 2021 25.72% = 0.93 × 0.97 × 25.90% × 0.70 × 1.57
Dec 31, 2020 23.69% = 0.93 × 0.97 × 24.36% × 0.68 × 1.58
Sep 26, 2020 — = — × — × — × — × 1.73
Jun 27, 2020 — = — × — × — × — × 1.77
Mar 28, 2020 — = — × — × — × — × 1.75

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the decrease in return on equity ratio (ROE) over Q4 2024 is the decrease in financial leverage ratio.

Two-Component Disaggregation of ROA

Cadence Design Systems Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2024 11.76% = 22.74% × 0.52
Sep 30, 2024 11.34% = 23.87% × 0.47
Jun 30, 2024 14.61% = 25.36% × 0.58
Mar 31, 2024 18.30% = 25.68% × 0.71
Dec 31, 2023 18.36% = 25.46% × 0.72
Sep 30, 2023 17.63% = 24.42% × 0.72
Jun 30, 2023 17.26% = 23.41% × 0.74
Mar 31, 2023 16.54% = 23.23% × 0.71
Dec 31, 2022 16.53% = 23.84% × 0.69
Oct 1, 2022 15.80% = 22.86% × 0.69
Jul 2, 2022 17.77% = 23.61% × 0.75
Apr 2, 2022 16.93% = 23.59% × 0.72
Dec 31, 2021 15.87% = 23.29% × 0.68
Oct 2, 2021 16.45% = 23.30% × 0.71
Jul 3, 2021 16.46% = 23.47% × 0.70
Apr 3, 2021 16.35% = 23.34% × 0.70
Dec 31, 2020 14.95% = 22.02% × 0.68
Sep 26, 2020 — = — × —
Jun 27, 2020 — = — × —
Mar 28, 2020 — = — × —

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2024 is the increase in asset turnover ratio.

Four-Component Disaggregation of ROA

Cadence Design Systems Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2024 11.76% = 0.76 × 0.95 × 31.71% × 0.52
Sep 30, 2024 11.34% = 0.79 × 0.96 × 31.61% × 0.47
Jun 30, 2024 14.61% = 0.82 × 0.97 × 31.90% × 0.58
Mar 31, 2024 18.30% = 0.82 × 0.97 × 32.03% × 0.71
Dec 31, 2023 18.36% = 0.81 × 0.97 × 32.23% × 0.72
Sep 30, 2023 17.63% = 0.85 × 0.97 × 29.75% × 0.72
Jun 30, 2023 17.26% = 0.82 × 0.97 × 29.35% × 0.74
Mar 31, 2023 16.54% = 0.81 × 0.97 × 29.47% × 0.71
Dec 31, 2022 16.53% = 0.81 × 0.98 × 29.99% × 0.69
Oct 1, 2022 15.80% = 0.76 × 0.98 × 30.48% × 0.69
Jul 2, 2022 17.77% = 0.80 × 0.98 × 29.91% × 0.75
Apr 2, 2022 16.93% = 0.85 × 0.98 × 28.31% × 0.72
Dec 31, 2021 15.87% = 0.91 × 0.98 × 26.28% × 0.68
Oct 2, 2021 16.45% = 0.91 × 0.98 × 26.16% × 0.71
Jul 3, 2021 16.46% = 0.92 × 0.98 × 26.16% × 0.70
Apr 3, 2021 16.35% = 0.93 × 0.97 × 25.90% × 0.70
Dec 31, 2020 14.95% = 0.93 × 0.97 × 24.36% × 0.68
Sep 26, 2020 — = — × — × — × —
Jun 27, 2020 — = — × — × — × —
Mar 28, 2020 — = — × — × — × —

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2024 is the increase in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Cadence Design Systems Inc., decomposition of net profit margin ratio (quarterly data)

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2024 22.74% = 0.76 × 0.95 × 31.71%
Sep 30, 2024 23.87% = 0.79 × 0.96 × 31.61%
Jun 30, 2024 25.36% = 0.82 × 0.97 × 31.90%
Mar 31, 2024 25.68% = 0.82 × 0.97 × 32.03%
Dec 31, 2023 25.46% = 0.81 × 0.97 × 32.23%
Sep 30, 2023 24.42% = 0.85 × 0.97 × 29.75%
Jun 30, 2023 23.41% = 0.82 × 0.97 × 29.35%
Mar 31, 2023 23.23% = 0.81 × 0.97 × 29.47%
Dec 31, 2022 23.84% = 0.81 × 0.98 × 29.99%
Oct 1, 2022 22.86% = 0.76 × 0.98 × 30.48%
Jul 2, 2022 23.61% = 0.80 × 0.98 × 29.91%
Apr 2, 2022 23.59% = 0.85 × 0.98 × 28.31%
Dec 31, 2021 23.29% = 0.91 × 0.98 × 26.28%
Oct 2, 2021 23.30% = 0.91 × 0.98 × 26.16%
Jul 3, 2021 23.47% = 0.92 × 0.98 × 26.16%
Apr 3, 2021 23.34% = 0.93 × 0.97 × 25.90%
Dec 31, 2020 22.02% = 0.93 × 0.97 × 24.36%
Sep 26, 2020 — = — × — × —
Jun 27, 2020 — = — × — × —
Mar 28, 2020 — = — × — × —

Based on: 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).

The primary reason for the decrease in net profit margin ratio over Q4 2024 is the decrease in effect of taxes measured by tax burden ratio.