Stock Analysis on Net
Stock Analysis on Net

Synopsys Inc. (NASDAQ:SNPS) 

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Synopsys Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Oct 31, 2024 25.17% = 17.31% × 1.45
Jul 31, 2024 19.44% = 12.86% × 1.51
Apr 30, 2024 19.94% = 12.96% × 1.54
Jan 31, 2024 21.10% = 13.33% × 1.58
Oct 31, 2023 20.01% = 11.90% × 1.68
Jul 31, 2023 17.36% = 10.42% × 1.67
Apr 30, 2023 15.79% = 9.40% × 1.68
Jan 31, 2023 16.72% = 9.85% × 1.70
Oct 31, 2022 17.85% = 10.45% × 1.71
Jul 31, 2022 18.42% = 11.07% × 1.66
Apr 30, 2022 18.13% = 10.95% × 1.66
Jan 31, 2022 16.87% = 10.21% × 1.65
Oct 31, 2021 14.31% = 8.66% × 1.65
Jul 31, 2021 14.63% = 8.88% × 1.65
Apr 30, 2021 15.88% = 9.69% × 1.64
Jan 31, 2021 14.80% = 9.02% × 1.64
Oct 31, 2020 13.54% = 8.27% × 1.64
Jul 31, 2020 13.66% = 8.19% × 1.67
Apr 30, 2020 11.10% = 6.48% × 1.71
Jan 31, 2020 11.64% = 6.70% × 1.74
Oct 31, 2019 13.04% = 8.31% × 1.57
Jul 31, 2019 — = — × 1.56
Apr 30, 2019 — = — × 1.58
Jan 31, 2019 — = — × 1.68

Based on: 10-K (reporting date: 2024-10-31), 10-Q (reporting date: 2024-07-31), 10-Q (reporting date: 2024-04-30), 10-Q (reporting date: 2024-01-31), 10-K (reporting date: 2023-10-31), 10-Q (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-31), 10-K (reporting date: 2022-10-31), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-31), 10-K (reporting date: 2021-10-31), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-Q (reporting date: 2021-01-31), 10-K (reporting date: 2020-10-31), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-K (reporting date: 2019-10-31), 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2024 is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Synopsys Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Oct 31, 2024 25.17% = 36.94% × 0.47 × 1.45
Jul 31, 2024 19.44% = 24.06% × 0.53 × 1.51
Apr 30, 2024 19.94% = 23.05% × 0.56 × 1.54
Jan 31, 2024 21.10% = 22.96% × 0.58 × 1.58
Oct 31, 2023 20.01% = 21.05% × 0.57 × 1.68
Jul 31, 2023 17.36% = 18.71% × 0.56 × 1.67
Apr 30, 2023 15.79% = 17.41% × 0.54 × 1.68
Jan 31, 2023 16.72% = 18.22% × 0.54 × 1.70
Oct 31, 2022 17.85% = 19.38% × 0.54 × 1.71
Jul 31, 2022 18.42% = 20.86% × 0.53 × 1.66
Apr 30, 2022 18.13% = 21.19% × 0.52 × 1.66
Jan 31, 2022 16.87% = 20.18% × 0.51 × 1.65
Oct 31, 2021 14.31% = 18.02% × 0.48 × 1.65
Jul 31, 2021 14.63% = 18.48% × 0.48 × 1.65
Apr 30, 2021 15.88% = 20.27% × 0.48 × 1.64
Jan 31, 2021 14.80% = 18.91% × 0.48 × 1.64
Oct 31, 2020 13.54% = 18.03% × 0.46 × 1.64
Jul 31, 2020 13.66% = 17.88% × 0.46 × 1.67
Apr 30, 2020 11.10% = 13.96% × 0.46 × 1.71
Jan 31, 2020 11.64% = 14.31% × 0.47 × 1.74
Oct 31, 2019 13.04% = 15.84% × 0.52 × 1.57
Jul 31, 2019 — = — × — × 1.56
Apr 30, 2019 — = — × — × 1.58
Jan 31, 2019 — = — × — × 1.68

Based on: 10-K (reporting date: 2024-10-31), 10-Q (reporting date: 2024-07-31), 10-Q (reporting date: 2024-04-30), 10-Q (reporting date: 2024-01-31), 10-K (reporting date: 2023-10-31), 10-Q (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-31), 10-K (reporting date: 2022-10-31), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-31), 10-K (reporting date: 2021-10-31), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-Q (reporting date: 2021-01-31), 10-K (reporting date: 2020-10-31), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-K (reporting date: 2019-10-31), 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2024 is the increase in profitability measured by net profit margin ratio.

Two-Component Disaggregation of ROA

Synopsys Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Oct 31, 2024 17.31% = 36.94% × 0.47
Jul 31, 2024 12.86% = 24.06% × 0.53
Apr 30, 2024 12.96% = 23.05% × 0.56
Jan 31, 2024 13.33% = 22.96% × 0.58
Oct 31, 2023 11.90% = 21.05% × 0.57
Jul 31, 2023 10.42% = 18.71% × 0.56
Apr 30, 2023 9.40% = 17.41% × 0.54
Jan 31, 2023 9.85% = 18.22% × 0.54
Oct 31, 2022 10.45% = 19.38% × 0.54
Jul 31, 2022 11.07% = 20.86% × 0.53
Apr 30, 2022 10.95% = 21.19% × 0.52
Jan 31, 2022 10.21% = 20.18% × 0.51
Oct 31, 2021 8.66% = 18.02% × 0.48
Jul 31, 2021 8.88% = 18.48% × 0.48
Apr 30, 2021 9.69% = 20.27% × 0.48
Jan 31, 2021 9.02% = 18.91% × 0.48
Oct 31, 2020 8.27% = 18.03% × 0.46
Jul 31, 2020 8.19% = 17.88% × 0.46
Apr 30, 2020 6.48% = 13.96% × 0.46
Jan 31, 2020 6.70% = 14.31% × 0.47
Oct 31, 2019 8.31% = 15.84% × 0.52
Jul 31, 2019 — = — × —
Apr 30, 2019 — = — × —
Jan 31, 2019 — = — × —

Based on: 10-K (reporting date: 2024-10-31), 10-Q (reporting date: 2024-07-31), 10-Q (reporting date: 2024-04-30), 10-Q (reporting date: 2024-01-31), 10-K (reporting date: 2023-10-31), 10-Q (reporting date: 2023-07-31), 10-Q (reporting date: 2023-04-30), 10-Q (reporting date: 2023-01-31), 10-K (reporting date: 2022-10-31), 10-Q (reporting date: 2022-07-31), 10-Q (reporting date: 2022-04-30), 10-Q (reporting date: 2022-01-31), 10-K (reporting date: 2021-10-31), 10-Q (reporting date: 2021-07-31), 10-Q (reporting date: 2021-04-30), 10-Q (reporting date: 2021-01-31), 10-K (reporting date: 2020-10-31), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-04-30), 10-Q (reporting date: 2020-01-31), 10-K (reporting date: 2019-10-31), 10-Q (reporting date: 2019-07-31), 10-Q (reporting date: 2019-04-30), 10-Q (reporting date: 2019-01-31).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2024 is the increase in profitability measured by net profit margin ratio.