Stock Analysis on Net
Stock Analysis on Net

Honeywell International Inc. (NASDAQ:HON)

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

Honeywell International Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2024 30.64% = 7.59% × 4.04
Dec 31, 2023 35.68% = 9.20% × 3.88
Dec 31, 2022 29.74% = 7.97% × 3.73
Dec 31, 2021 29.85% = 8.60% × 3.47
Dec 31, 2020 27.23% = 7.40% × 3.68

Based on: 10-K (reporting date: 2024-12-31), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Honeywell International Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 30.64% = 14.82% × 0.51 × 4.04
Dec 31, 2023 35.68% = 15.43% × 0.60 × 3.88
Dec 31, 2022 29.74% = 14.00% × 0.57 × 3.73
Dec 31, 2021 29.85% = 16.11% × 0.53 × 3.47
Dec 31, 2020 27.23% = 14.64% × 0.51 × 3.68

Based on: 10-K (reporting date: 2024-12-31), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

Honeywell International Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 30.64% = 0.79 × 0.87 × 21.39% × 0.51 × 4.04
Dec 31, 2023 35.68% = 0.79 × 0.90 × 21.58% × 0.60 × 3.88
Dec 31, 2022 29.74% = 0.78 × 0.94 × 19.15% × 0.57 × 3.73
Dec 31, 2021 29.85% = 0.77 × 0.95 × 21.84% × 0.53 × 3.47
Dec 31, 2020 27.23% = 0.81 × 0.94 × 19.26% × 0.51 × 3.68

Based on: 10-K (reporting date: 2024-12-31), 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).

The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

Honeywell International Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2024 7.59% = 14.82% × 0.51
Dec 31, 2023 9.20% = 15.43% × 0.60
Dec 31, 2022 7.97% = 14.00% × 0.57
Dec 31, 2021 8.60% = 16.11% × 0.53
Dec 31, 2020 7.40% = 14.64% × 0.51

Based on: 10-K (reporting date: 2024-12-31), 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).

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

Four-Component Disaggregation of ROA

Honeywell International Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2024 7.59% = 0.79 × 0.87 × 21.39% × 0.51
Dec 31, 2023 9.20% = 0.79 × 0.90 × 21.58% × 0.60
Dec 31, 2022 7.97% = 0.78 × 0.94 × 19.15% × 0.57
Dec 31, 2021 8.60% = 0.77 × 0.95 × 21.84% × 0.53
Dec 31, 2020 7.40% = 0.81 × 0.94 × 19.26% × 0.51

Based on: 10-K (reporting date: 2024-12-31), 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).

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

Disaggregation of Net Profit Margin

Honeywell International Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2024 14.82% = 0.79 × 0.87 × 21.39%
Dec 31, 2023 15.43% = 0.79 × 0.90 × 21.58%
Dec 31, 2022 14.00% = 0.78 × 0.94 × 19.15%
Dec 31, 2021 16.11% = 0.77 × 0.95 × 21.84%
Dec 31, 2020 14.64% = 0.81 × 0.94 × 19.26%

Based on: 10-K (reporting date: 2024-12-31), 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).

The primary reason for the decrease in net profit margin ratio over 2024 year is the decrease in effect of interest expense measured by interest burden ratio.