Stock Analysis on Net
Stock Analysis on Net

Chevron Corp. (NYSE:CVX)

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

Chevron Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 13.28% = 8.17% × 1.63
Dec 31, 2022 22.27% = 13.76% × 1.62
Dec 31, 2021 11.24% = 6.52% × 1.72
Dec 31, 2020 -4.21% = -2.31% × 1.82
Dec 31, 2019 2.03% = 1.23% × 1.65

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Chevron Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 13.28% = 10.85% × 0.75 × 1.63
Dec 31, 2022 22.27% = 15.05% × 0.91 × 1.62
Dec 31, 2021 11.24% = 10.04% × 0.65 × 1.72
Dec 31, 2020 -4.21% = -5.87% × 0.39 × 1.82
Dec 31, 2019 2.03% = 2.09% × 0.59 × 1.65

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Chevron Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 13.28% = 0.72 × 0.98 × 15.24% × 0.75 × 1.63
Dec 31, 2022 22.27% = 0.72 × 0.99 × 21.23% × 0.91 × 1.62
Dec 31, 2021 11.24% = 0.72 × 0.97 × 14.32% × 0.65 × 1.72
Dec 31, 2020 -4.21% = — × — × -7.13% × 0.39 × 1.82
Dec 31, 2019 2.03% = 0.52 × 0.88 × 4.59% × 0.59 × 1.65

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

Chevron Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 8.17% = 10.85% × 0.75
Dec 31, 2022 13.76% = 15.05% × 0.91
Dec 31, 2021 6.52% = 10.04% × 0.65
Dec 31, 2020 -2.31% = -5.87% × 0.39
Dec 31, 2019 1.23% = 2.09% × 0.59

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Chevron Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2023 8.17% = 0.72 × 0.98 × 15.24% × 0.75
Dec 31, 2022 13.76% = 0.72 × 0.99 × 21.23% × 0.91
Dec 31, 2021 6.52% = 0.72 × 0.97 × 14.32% × 0.65
Dec 31, 2020 -2.31% = — × — × -7.13% × 0.39
Dec 31, 2019 1.23% = 0.52 × 0.88 × 4.59% × 0.59

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Chevron Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2023 10.85% = 0.72 × 0.98 × 15.24%
Dec 31, 2022 15.05% = 0.72 × 0.99 × 21.23%
Dec 31, 2021 10.04% = 0.72 × 0.97 × 14.32%
Dec 31, 2020 -5.87% = — × — × -7.13%
Dec 31, 2019 2.09% = 0.52 × 0.88 × 4.59%

Based on: 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), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.