Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
The annual financial data reveals several notable trends in key performance indicators over the analyzed periods. There is a consistent improvement in the company's asset profitability, as reflected by the increasing Return on Assets (ROA). The ROA demonstrates a steady upward trajectory from 7.2% in 2020 to a peak of 10.55% in 2024, slightly declining to 10.5% by 2025. This indicates enhanced efficiency in the use of assets to generate earnings.
Financial leverage exhibits a fluctuating but overall declining trend during the same timeframe. Starting at a ratio of 3.04 in 2020, it rises to 3.37 in 2021, followed by a gradual decrease to 2.64 by 2025. This reduction in leverage ratio suggests a conservative approach towards debt management and potentially reduced financial risk.
Return on Equity (ROE) shows notable volatility across the years but remains at relatively high levels, indicating favorable returns to shareholders. It increased significantly from 21.89% in 2020 to a peak of 31.19% in 2024 before decreasing to 27.77% in 2025. The fluctuation in ROE reflects changes in net income relative to equity, influenced by both operational performance and financial structure adjustments.
- Return on Assets (ROA)
- Displays continuous improvement over the years, signaling greater asset utilization efficiency.
- Financial Leverage
- Peaks early in the period then steadily declines, implying a move towards reducing reliance on debt financing.
- Return on Equity (ROE)
- Remains volatile but generally strong, suggesting good profitability and shareholder value creation despite leverage changes.
Overall, the company demonstrates effective asset management and a prudent approach to leverage, resulting in solid returns to equity holders. The trends point to a strengthening financial position with an emphasis on sustainable profitability and risk moderation.
Three-Component Disaggregation of ROE
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
The financial data reveals notable trends in profitability, efficiency, leverage, and overall return on equity for the analyzed periods.
- Net Profit Margin
- The net profit margin demonstrates a consistent upward trend over the years, gradually increasing from 2.45% in 2020 to 3.00% by 2025. This indicates improving profitability, suggesting better cost management or enhanced revenue quality.
- Asset Turnover
- This ratio, reflecting the efficiency of asset utilization in generating sales, shows an overall increase from 2.94 in 2020 to peak at 3.57 in 2024, followed by a slight decline to 3.50 in 2025. The upward movement implies improving operational efficiency, although the minor dip at the end may warrant monitoring.
- Financial Leverage
- Financial leverage exhibits variability with an initial rise from 3.04 in 2020 to 3.37 in 2021, then a progressive decline to 2.64 in 2025. This decreasing trend suggests a reduction in reliance on debt or other borrowed funds relative to equity, indicating potentially lower financial risk over time.
- Return on Equity (ROE)
- ROE reflects the company’s effectiveness in generating returns on shareholders' equity. It shows fluctuation across the periods: increasing sharply from 21.89% in 2020 to 28.51% in 2021, stabilizing near that level through 2022, declining to 25.11% in 2023, peaking again at 31.19% in 2024, and finally dropping to 27.77% in 2025. These variations may correlate with changes in leverage and operational performance.
Overall, the trends suggest ongoing improvements in profitability and asset utilization, combined with a strategic reduction in financial leverage. The ROE fluctuations imply that while returns to shareholders remain strong, they are influenced by both efficiency and leverage changes, highlighting the dynamic interplay between operational execution and capital structure management.
Five-Component Disaggregation of ROE
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
- Tax Burden
- The tax burden ratio remained relatively stable over the analyzed period, fluctuating slightly between 0.74 and 0.76. This consistency suggests a steady effective tax rate with minimal impact on the company's profitability from tax changes.
- Interest Burden
- The interest burden ratio showed a marginal increasing trend, rising gradually from 0.97 in 2020 to 0.99 in 2025. This indicates a slight improvement in the company's ability to cover interest expenses through operating earnings, reflecting a stable or slightly enhanced interest coverage position.
- EBIT Margin
- The EBIT margin exhibited a positive upward trend, increasing from 3.35% in 2020 to 4.07% in 2025. This growth in operating profitability demonstrates improved operational efficiency or favorable pricing, contributing to stronger earnings before interest and taxes relative to revenue.
- Asset Turnover
- Asset turnover increased notably from 2.94 in 2020 to a peak of 3.57 in 2024 before slightly declining to 3.50 in 2025. The overall trend reflects enhanced efficiency in utilizing assets to generate sales, suggesting effective management of asset base in relation to revenue generation despite the minor moderation towards the end of the period.
- Financial Leverage
- Financial leverage displayed a decreasing trend from 3.37 in 2021 to 2.64 in 2025, after a temporary peak in 2021. The reduction in leverage indicates a strategic shift towards lower reliance on debt financing or other liabilities, potentially reducing financial risk and interest obligations.
- Return on Equity (ROE)
- Return on equity experienced variability, rising sharply from 21.89% in 2020 to a peak of 31.19% in 2024, followed by a slight decline to 27.77% in 2025. The fluctuations in ROE are influenced by changes in profitability, asset turnover, and financial leverage. Despite the decrease towards 2025, ROE remains strong, demonstrating overall effective use of shareholder equity to generate earnings.
Two-Component Disaggregation of ROA
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
The financial ratios demonstrate a consistent positive trend over the analyzed periods, indicating improving operational efficiency and profitability.
- Net Profit Margin
- The net profit margin has shown a steady increase from 2.45% in 2020 to 3.00% in 2025. This suggests that the company has been increasingly successful in converting revenue into actual profit, reflecting enhanced cost management or pricing strategies over the years.
- Asset Turnover
- Asset turnover ratio trends upward from 2.94 in 2020 to a peak of 3.57 in 2024, followed by a slight decrease to 3.50 in 2025. This indicates improved efficiency in utilizing assets to generate revenue, although the slight dip near the end suggests a possible stabilization or marginal decrease in asset productivity.
- Return on Assets (ROA)
- ROA exhibits a strong growth pattern from 7.2% in 2020 to 10.55% in 2024, with a marginal decline to 10.5% in 2025. This ratio, combining profitability and asset efficiency, corroborates the underlying improvements in both profit margin and asset turnover, highlighting enhanced overall asset utilization to generate earnings.
Overall, the examined financial ratios indicate consistent improvement in profitability and asset utilization, suggesting effective management practices and operational strength throughout the reported periods.
Four-Component Disaggregation of ROA
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
- Tax Burden
- The tax burden ratio remained relatively stable over the six-year period, fluctuating slightly around 0.75. This stability suggests consistent tax expense management relative to earnings before taxes.
- Interest Burden
- The interest burden ratio showed a marginal upward trend from 0.97 in 2020 to 0.99 in 2025, indicating a slight improvement in the company's ability to manage interest expenses relative to operating income.
- EBIT Margin
- The EBIT margin demonstrated a steady increase from 3.35% in 2020 to 4.07% in 2025. This upward trend reflects improving operating profitability, indicating enhanced operational efficiency or favorable cost control over time.
- Asset Turnover
- Asset turnover improved noticeably from 2.94 in 2020 to peak around 3.57 in 2024 before a marginal decline to 3.5 in 2025. The overall increase signifies better utilization of assets to generate sales, although the recent slight decrease may warrant monitoring.
- Return on Assets (ROA)
- Return on assets exhibited a consistent and significant growth trajectory, rising from 7.2% in 2020 to 10.5% in 2025. This indicates increasing overall efficiency in generating net income from the asset base and reflects positively on the company's profitability trend.
Disaggregation of Net Profit Margin
Based on: 10-K (reporting date: 2025-08-31), 10-K (reporting date: 2024-09-01), 10-K (reporting date: 2023-09-03), 10-K (reporting date: 2022-08-28), 10-K (reporting date: 2021-08-29), 10-K (reporting date: 2020-08-30).
- Tax Burden
- The tax burden ratio has remained relatively stable over the observed periods, fluctuating slightly between 0.74 and 0.76. This indicates consistent effective tax rates without significant changes in tax expenses relative to earnings before tax.
- Interest Burden
- The interest burden has shown a marginal upward trend, increasing from 0.97 to 0.99. This suggests a slight improvement in covering interest expenses, reflecting either reduced interest costs or better earnings before interest and taxes relative to interest expenses.
- EBIT Margin
- The EBIT margin has demonstrated a steady increase from 3.35% to 4.07%. This upward trend highlights improved operational efficiency or gross profitability, suggesting that the company has enhanced its earnings before interest and taxes as a proportion of its revenue.
- Net Profit Margin
- The net profit margin also shows a consistent positive trend, rising from 2.45% to 3.00%. This increase aligns with the EBIT margin improvement and the relatively stable tax and interest burdens, indicating effective cost control and profitability enhancement over time.