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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- Statement of Comprehensive Income
- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Geographic Areas
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2005
- Total Asset Turnover since 2005
- Analysis of Debt
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Two-Component Disaggregation of ROE
Emerson Electric Co., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Sep 30, 2019 | = | × | |||
| Sep 30, 2018 | = | × | |||
| Sep 30, 2017 | = | × | |||
| Sep 30, 2016 | = | × | |||
| Sep 30, 2015 | = | × | |||
| Sep 30, 2014 | = | × |
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
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | = | × | × | ||||
| Sep 30, 2018 | = | × | × | ||||
| Sep 30, 2017 | = | × | × | ||||
| Sep 30, 2016 | = | × | × | ||||
| Sep 30, 2015 | = | × | × | ||||
| Sep 30, 2014 | = | × | × |
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
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
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Sep 30, 2019 | = | × | |||
| Sep 30, 2018 | = | × | |||
| Sep 30, 2017 | = | × | |||
| Sep 30, 2016 | = | × | |||
| Sep 30, 2015 | = | × | |||
| Sep 30, 2014 | = | × |
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
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | = | × | × | × | |||||
| Sep 30, 2018 | = | × | × | × | |||||
| Sep 30, 2017 | = | × | × | × | |||||
| Sep 30, 2016 | = | × | × | × | |||||
| Sep 30, 2015 | = | × | × | × | |||||
| Sep 30, 2014 | = | × | × | × |
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
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2019 | = | × | × | ||||
| Sep 30, 2018 | = | × | × | ||||
| Sep 30, 2017 | = | × | × | ||||
| Sep 30, 2016 | = | × | × | ||||
| Sep 30, 2015 | = | × | × | ||||
| Sep 30, 2014 | = | × | × |
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.