Stock Analysis on Net
Stock Analysis on Net

Hershey Co. (NYSE:HSY)

This company has been moved to the archive! The financial data has not been updated since July 27, 2023.

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

Hershey Co., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2022 49.85% = 15.02% × 3.32
Dec 31, 2021 53.59% = 14.19% × 3.78
Dec 31, 2020 57.23% = 14.00% × 4.09
Dec 31, 2019 66.10% = 14.12% × 4.68
Dec 31, 2018 84.19% = 15.29% × 5.51

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2022 year is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

Hershey Co., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2022 49.85% = 15.79% × 0.95 × 3.32
Dec 31, 2021 53.59% = 16.47% × 0.86 × 3.78
Dec 31, 2020 57.23% = 15.69% × 0.89 × 4.09
Dec 31, 2019 66.10% = 14.40% × 0.98 × 4.68
Dec 31, 2018 84.19% = 15.11% × 1.01 × 5.51

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2022 year is the decrease in financial leverage ratio.

Five-Component Disaggregation of ROE

Hershey Co., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2022 49.85% = 0.86 × 0.93 × 19.74% × 0.95 × 3.32
Dec 31, 2021 53.59% = 0.82 × 0.93 × 21.42% × 0.86 × 3.78
Dec 31, 2020 57.23% = 0.85 × 0.91 × 20.27% × 0.89 × 4.09
Dec 31, 2019 66.10% = 0.83 × 0.90 × 19.23% × 0.98 × 4.68
Dec 31, 2018 84.19% = 0.83 × 0.91 × 20.07% × 1.01 × 5.51

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2022 year is the decrease in financial leverage ratio.

Two-Component Disaggregation of ROA

Hershey Co., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2022 15.02% = 15.79% × 0.95
Dec 31, 2021 14.19% = 16.47% × 0.86
Dec 31, 2020 14.00% = 15.69% × 0.89
Dec 31, 2019 14.12% = 14.40% × 0.98
Dec 31, 2018 15.29% = 15.11% × 1.01

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in asset turnover ratio.

Four-Component Disaggregation of ROA

Hershey Co., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2022 15.02% = 0.86 × 0.93 × 19.74% × 0.95
Dec 31, 2021 14.19% = 0.82 × 0.93 × 21.42% × 0.86
Dec 31, 2020 14.00% = 0.85 × 0.91 × 20.27% × 0.89
Dec 31, 2019 14.12% = 0.83 × 0.90 × 19.23% × 0.98
Dec 31, 2018 15.29% = 0.83 × 0.91 × 20.07% × 1.01

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Hershey Co., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2022 15.79% = 0.86 × 0.93 × 19.74%
Dec 31, 2021 16.47% = 0.82 × 0.93 × 21.42%
Dec 31, 2020 15.69% = 0.85 × 0.91 × 20.27%
Dec 31, 2019 14.40% = 0.83 × 0.90 × 19.23%
Dec 31, 2018 15.11% = 0.83 × 0.91 × 20.07%

Based on: 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), 10-K (reporting date: 2018-12-31).

The primary reason for the decrease in net profit margin ratio over 2022 year is the decrease in operating profitability measured by EBIT margin ratio.