Stock Analysis on Net
Stock Analysis on Net

Emerson Electric Co. (NYSE:EMR)

This company has been moved to the archive! The financial data has not been updated since April 24, 2020.

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

Emerson Electric Co., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Sep 30, 2019 28.01% = 11.25% × 2.49
Sep 30, 2018 24.62% = 10.80% × 2.28
Sep 30, 2017 17.41% = 7.75% × 2.25
Sep 30, 2016 21.60% = 7.52% × 2.87
Sep 30, 2015 33.54% = 12.27% × 2.73
Sep 30, 2014 21.22% = 8.88% × 2.39

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.

Three-Component Disaggregation of ROE

Emerson Electric Co., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Sep 30, 2019 28.01% = 12.55% × 0.90 × 2.49
Sep 30, 2018 24.62% = 12.66% × 0.85 × 2.28
Sep 30, 2017 17.41% = 9.94% × 0.78 × 2.25
Sep 30, 2016 21.60% = 11.26% × 0.67 × 2.87
Sep 30, 2015 33.54% = 12.15% × 1.01 × 2.73
Sep 30, 2014 21.22% = 8.75% × 1.01 × 2.39

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.

Five-Component Disaggregation of ROE

Emerson Electric Co., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Sep 30, 2019 28.01% = 0.81 × 0.93 × 16.54% × 0.90 × 2.49
Sep 30, 2018 24.62% = 0.83 × 0.93 × 16.36% × 0.85 × 2.28
Sep 30, 2017 17.41% = 0.70 × 0.92 × 15.59% × 0.78 × 2.25
Sep 30, 2016 21.60% = 0.70 × 0.92 × 17.54% × 0.67 × 2.87
Sep 30, 2015 33.54% = 0.65 × 0.95 × 19.45% × 1.01 × 2.73
Sep 30, 2014 21.22% = 0.65 × 0.94 × 14.38% × 1.01 × 2.39

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.

Two-Component Disaggregation of ROA

Emerson Electric Co., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Sep 30, 2019 11.25% = 12.55% × 0.90
Sep 30, 2018 10.80% = 12.66% × 0.85
Sep 30, 2017 7.75% = 9.94% × 0.78
Sep 30, 2016 7.52% = 11.26% × 0.67
Sep 30, 2015 12.27% = 12.15% × 1.01
Sep 30, 2014 8.88% = 8.75% × 1.01

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the increase in return on assets ratio (ROA) over 2019 year is the increase in asset turnover ratio.

Four-Component Disaggregation of ROA

Emerson Electric Co., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Sep 30, 2019 11.25% = 0.81 × 0.93 × 16.54% × 0.90
Sep 30, 2018 10.80% = 0.83 × 0.93 × 16.36% × 0.85
Sep 30, 2017 7.75% = 0.70 × 0.92 × 15.59% × 0.78
Sep 30, 2016 7.52% = 0.70 × 0.92 × 17.54% × 0.67
Sep 30, 2015 12.27% = 0.65 × 0.95 × 19.45% × 1.01
Sep 30, 2014 8.88% = 0.65 × 0.94 × 14.38% × 1.01

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the increase in return on assets ratio (ROA) over 2019 year is the increase in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Emerson Electric Co., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Sep 30, 2019 12.55% = 0.81 × 0.93 × 16.54%
Sep 30, 2018 12.66% = 0.83 × 0.93 × 16.36%
Sep 30, 2017 9.94% = 0.70 × 0.92 × 15.59%
Sep 30, 2016 11.26% = 0.70 × 0.92 × 17.54%
Sep 30, 2015 12.15% = 0.65 × 0.95 × 19.45%
Sep 30, 2014 8.75% = 0.65 × 0.94 × 14.38%

Based on: 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30), 10-K (reporting date: 2014-09-30).

The primary reason for the decrease in net profit margin ratio over 2019 year is the decrease in effect of taxes measured by tax burden ratio.