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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- Common-Size Income Statement
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- Common Stock Valuation Ratios
- Capital Asset Pricing Model (CAPM)
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- Operating Profit Margin since 2005
- Debt to Equity since 2005
- Price to Sales (P/S) since 2005
- Analysis of Revenues
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Two-Component Disaggregation of ROE
Home Depot Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Jan 28, 2024 | = | × | |||
| Jan 29, 2023 | = | × | |||
| Jan 30, 2022 | = | × | |||
| Jan 31, 2021 | = | × | |||
| Feb 2, 2020 | = | × | |||
| Feb 3, 2019 | = | × |
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.
Three-Component Disaggregation of ROE
Home Depot Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Jan 28, 2024 | = | × | × | ||||
| Jan 29, 2023 | = | × | × | ||||
| Jan 30, 2022 | = | × | × | ||||
| Jan 31, 2021 | = | × | × | ||||
| Feb 2, 2020 | = | × | × | ||||
| Feb 3, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.
Five-Component Disaggregation of ROE
Home Depot Inc., decomposition of ROE
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in financial leverage ratio.
Two-Component Disaggregation of ROA
Home Depot Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Jan 28, 2024 | = | × | |||
| Jan 29, 2023 | = | × | |||
| Jan 30, 2022 | = | × | |||
| Jan 31, 2021 | = | × | |||
| Feb 2, 2020 | = | × | |||
| Feb 3, 2019 | = | × |
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Home Depot Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Jan 28, 2024 | = | × | × | × | |||||
| Jan 29, 2023 | = | × | × | × | |||||
| Jan 30, 2022 | = | × | × | × | |||||
| Jan 31, 2021 | = | × | × | × | |||||
| Feb 2, 2020 | = | × | × | × | |||||
| Feb 3, 2019 | = | × | × | × |
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Home Depot Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Jan 28, 2024 | = | × | × | ||||
| Jan 29, 2023 | = | × | × | ||||
| Jan 30, 2022 | = | × | × | ||||
| Jan 31, 2021 | = | × | × | ||||
| Feb 2, 2020 | = | × | × | ||||
| Feb 3, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-02-02), 10-K (reporting date: 2019-02-03).
The primary reason for the decrease in net profit margin ratio over 2024 year is the decrease in operating profitability measured by EBIT margin ratio.