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
- Common-Size Balance Sheet: Assets
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Present Value of Free Cash Flow to Equity (FCFE)
- Net Profit Margin since 2005
- Operating Profit Margin since 2005
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Two-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Feb 2, 2024 | = | × | |||
| Feb 3, 2023 | = | × | |||
| Jan 28, 2022 | = | × | |||
| Jan 29, 2021 | = | × | |||
| Jan 31, 2020 | = | × | |||
| Feb 1, 2019 | = | × |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
Three-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Feb 2, 2024 | = | × | × | ||||
| Feb 3, 2023 | = | × | × | ||||
| Jan 28, 2022 | = | × | × | ||||
| Jan 29, 2021 | = | × | × | ||||
| Jan 31, 2020 | = | × | × | ||||
| Feb 1, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
Five-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
Two-Component Disaggregation of ROA
Lowe’s Cos. Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Feb 2, 2024 | = | × | |||
| Feb 3, 2023 | = | × | |||
| Jan 28, 2022 | = | × | |||
| Jan 29, 2021 | = | × | |||
| Jan 31, 2020 | = | × | |||
| Feb 1, 2019 | = | × |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Lowe’s Cos. Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Feb 2, 2024 | = | × | × | × | |||||
| Feb 3, 2023 | = | × | × | × | |||||
| Jan 28, 2022 | = | × | × | × | |||||
| Jan 29, 2021 | = | × | × | × | |||||
| Jan 31, 2020 | = | × | × | × | |||||
| Feb 1, 2019 | = | × | × | × |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Lowe’s Cos. Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Feb 2, 2024 | = | × | × | ||||
| Feb 3, 2023 | = | × | × | ||||
| Jan 28, 2022 | = | × | × | ||||
| Jan 29, 2021 | = | × | × | ||||
| Jan 31, 2020 | = | × | × | ||||
| Feb 1, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-02-02), 10-K (reporting date: 2023-02-03), 10-K (reporting date: 2022-01-28), 10-K (reporting date: 2021-01-29), 10-K (reporting date: 2020-01-31), 10-K (reporting date: 2019-02-01).
The primary reason for the increase in net profit margin ratio over 2024 year is the increase in operating profitability measured by EBIT margin ratio.