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.
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- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Return on Assets (ROA) since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
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Two-Component Disaggregation of ROE
Ross Stores Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Jan 29, 2022 | = | × | |||
| Jan 30, 2021 | = | × | |||
| Feb 1, 2020 | = | × | |||
| Feb 2, 2019 | = | × | |||
| Feb 3, 2018 | = | × | |||
| Jan 28, 2017 | = | × |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by return on assets ratio (ROA).
Three-Component Disaggregation of ROE
Ross Stores Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Jan 29, 2022 | = | × | × | ||||
| Jan 30, 2021 | = | × | × | ||||
| Feb 1, 2020 | = | × | × | ||||
| Feb 2, 2019 | = | × | × | ||||
| Feb 3, 2018 | = | × | × | ||||
| Jan 28, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by net profit margin ratio.
Five-Component Disaggregation of ROE
Ross Stores Inc., decomposition of ROE
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.
Two-Component Disaggregation of ROA
Ross Stores Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Jan 29, 2022 | = | × | |||
| Jan 30, 2021 | = | × | |||
| Feb 1, 2020 | = | × | |||
| Feb 2, 2019 | = | × | |||
| Feb 3, 2018 | = | × | |||
| Jan 28, 2017 | = | × |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Ross Stores Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Jan 29, 2022 | = | × | × | × | |||||
| Jan 30, 2021 | = | × | × | × | |||||
| Feb 1, 2020 | = | × | × | × | |||||
| Feb 2, 2019 | = | × | × | × | |||||
| Feb 3, 2018 | = | × | × | × | |||||
| Jan 28, 2017 | = | × | × | × |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Ross Stores Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Jan 29, 2022 | = | × | × | ||||
| Jan 30, 2021 | = | × | × | ||||
| Feb 1, 2020 | = | × | × | ||||
| Feb 2, 2019 | = | × | × | ||||
| Feb 3, 2018 | = | × | × | ||||
| Jan 28, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03), 10-K (reporting date: 2017-01-28).
The primary reason for the increase in net profit margin ratio over 2022 year is the increase in operating profitability measured by EBIT margin ratio.