DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Keurig Dr Pepper Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Dec 31, 2021 | 8.59% | = | 4.24% | × | 2.03 |
| Dec 31, 2020 | 5.56% | = | 2.66% | × | 2.09 |
| Dec 31, 2019 | 5.39% | = | 2.53% | × | 2.13 |
| Dec 31, 2018 | 2.60% | = | 1.20% | × | 2.17 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in profitability measured by return on assets ratio (ROA).
Three-Component Disaggregation of ROE
Keurig Dr Pepper Inc., decomposition of ROE
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in profitability measured by net profit margin ratio.
Five-Component Disaggregation of ROE
Keurig Dr Pepper Inc., decomposition of ROE
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in operating profitability measured by EBIT margin ratio.
Two-Component Disaggregation of ROA
Keurig Dr Pepper Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Dec 31, 2021 | 4.24% | = | 16.92% | × | 0.25 |
| Dec 31, 2020 | 2.66% | = | 11.40% | × | 0.23 |
| Dec 31, 2019 | 2.53% | = | 11.28% | × | 0.22 |
| Dec 31, 2018 | 1.20% | = | 7.87% | × | 0.15 |
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in return on assets ratio (ROA) over 2021 year is the increase in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Keurig Dr Pepper Inc., decomposition of ROA
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in return on assets ratio (ROA) over 2021 year is the increase in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Keurig Dr Pepper Inc., decomposition of net profit margin ratio
Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).
The primary reason for the increase in net profit margin ratio over 2021 year is the increase in operating profitability measured by EBIT margin ratio.