Stock Analysis on Net
Stock Analysis on Net

Monolithic Power Systems Inc. (NASDAQ:MPWR)

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

Monolithic Power Systems Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2024 56.80% = 49.40% × 1.15
Dec 31, 2023 20.85% = 17.56% × 1.19
Dec 31, 2022 26.23% = 21.26% × 1.23
Dec 31, 2021 19.46% = 15.26% × 1.27
Dec 31, 2020 17.01% = 13.60% × 1.25

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 increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Monolithic Power Systems Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 56.80% = 80.95% × 0.61 × 1.15
Dec 31, 2023 20.85% = 23.47% × 0.75 × 1.19
Dec 31, 2022 26.23% = 24.39% × 0.87 × 1.23
Dec 31, 2021 19.46% = 20.04% × 0.76 × 1.27
Dec 31, 2020 17.01% = 19.47% × 0.70 × 1.25

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 increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Monolithic Power Systems Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2024 56.80% = 3.12 × 1.00 × 25.96% × 0.61 × 1.15
Dec 31, 2023 20.85% = 0.84 × 1.00 × 27.78% × 0.75 × 1.19
Dec 31, 2022 26.23% = 0.83 × 1.00 × 29.26% × 0.87 × 1.23
Dec 31, 2021 19.46% = 0.89 × 1.00 × 22.54% × 0.76 × 1.27
Dec 31, 2020 17.01% = 0.97 × 1.00 × 20.05% × 0.70 × 1.25

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 increase in return on equity ratio (ROE) over 2024 year is the increase in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

Monolithic Power Systems Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2024 49.40% = 80.95% × 0.61
Dec 31, 2023 17.56% = 23.47% × 0.75
Dec 31, 2022 21.26% = 24.39% × 0.87
Dec 31, 2021 15.26% = 20.04% × 0.76
Dec 31, 2020 13.60% = 19.47% × 0.70

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 increase in return on assets ratio (ROA) over 2024 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Monolithic Power Systems Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2024 49.40% = 3.12 × 1.00 × 25.96% × 0.61
Dec 31, 2023 17.56% = 0.84 × 1.00 × 27.78% × 0.75
Dec 31, 2022 21.26% = 0.83 × 1.00 × 29.26% × 0.87
Dec 31, 2021 15.26% = 0.89 × 1.00 × 22.54% × 0.76
Dec 31, 2020 13.60% = 0.97 × 1.00 × 20.05% × 0.70

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 increase in return on assets ratio (ROA) over 2024 year is the increase in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

Monolithic Power Systems Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2024 80.95% = 3.12 × 1.00 × 25.96%
Dec 31, 2023 23.47% = 0.84 × 1.00 × 27.78%
Dec 31, 2022 24.39% = 0.83 × 1.00 × 29.26%
Dec 31, 2021 20.04% = 0.89 × 1.00 × 22.54%
Dec 31, 2020 19.47% = 0.97 × 1.00 × 20.05%

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 increase in net profit margin ratio over 2024 year is the increase in effect of taxes measured by tax burden ratio.