Stock Analysis on Net
Stock Analysis on Net

KLA Corp. (NASDAQ:KLAC)

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

KLA Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jun 30, 2024 82.00% = 17.90% × 4.58
Jun 30, 2023 116.01% = 24.07% × 4.82
Jun 30, 2022 237.04% = 26.37% × 8.99
Jun 30, 2021 61.53% = 20.23% × 3.04
Jun 30, 2020 45.65% = 13.11% × 3.48
Jun 30, 2019 44.21% = 13.05% × 3.39

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

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

KLA Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jun 30, 2024 82.00% = 28.15% × 0.64 × 4.58
Jun 30, 2023 116.01% = 32.27% × 0.75 × 4.82
Jun 30, 2022 237.04% = 36.06% × 0.73 × 8.99
Jun 30, 2021 61.53% = 30.04% × 0.67 × 3.04
Jun 30, 2020 45.65% = 20.96% × 0.63 × 3.48
Jun 30, 2019 44.21% = 25.73% × 0.51 × 3.39

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

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

KLA Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jun 30, 2024 82.00% = 0.87 × 0.91 × 35.68% × 0.64 × 4.58
Jun 30, 2023 116.01% = 0.89 × 0.93 × 38.93% × 0.75 × 4.82
Jun 30, 2022 237.04% = 0.95 × 0.96 × 39.62% × 0.73 × 8.99
Jun 30, 2021 61.53% = 0.88 × 0.94 × 36.40% × 0.67 × 3.04
Jun 30, 2020 45.65% = 0.92 × 0.89 × 25.47% × 0.63 × 3.48
Jun 30, 2019 44.21% = 0.91 × 0.91 × 31.11% × 0.51 × 3.39

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

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

KLA Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jun 30, 2024 17.90% = 28.15% × 0.64
Jun 30, 2023 24.07% = 32.27% × 0.75
Jun 30, 2022 26.37% = 36.06% × 0.73
Jun 30, 2021 20.23% = 30.04% × 0.67
Jun 30, 2020 13.11% = 20.96% × 0.63
Jun 30, 2019 13.05% = 25.73% × 0.51

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

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

KLA Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jun 30, 2024 17.90% = 0.87 × 0.91 × 35.68% × 0.64
Jun 30, 2023 24.07% = 0.89 × 0.93 × 38.93% × 0.75
Jun 30, 2022 26.37% = 0.95 × 0.96 × 39.62% × 0.73
Jun 30, 2021 20.23% = 0.88 × 0.94 × 36.40% × 0.67
Jun 30, 2020 13.11% = 0.92 × 0.89 × 25.47% × 0.63
Jun 30, 2019 13.05% = 0.91 × 0.91 × 31.11% × 0.51

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

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

KLA Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jun 30, 2024 28.15% = 0.87 × 0.91 × 35.68%
Jun 30, 2023 32.27% = 0.89 × 0.93 × 38.93%
Jun 30, 2022 36.06% = 0.95 × 0.96 × 39.62%
Jun 30, 2021 30.04% = 0.88 × 0.94 × 36.40%
Jun 30, 2020 20.96% = 0.92 × 0.89 × 25.47%
Jun 30, 2019 25.73% = 0.91 × 0.91 × 31.11%

Based on: 10-K (reporting date: 2024-06-30), 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30).

The primary reason for the decrease in net profit margin ratio over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.