Stock Analysis on Net
Stock Analysis on Net

Lowe’s Cos. Inc. (NYSE:LOW)

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

Lowe’s Cos. Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Feb 2, 2024 — = 18.49% × —
Feb 3, 2023 — = 14.73% × —
Jan 28, 2022 — = 18.91% × —
Jan 29, 2021 406.05% = 12.49% × 32.52
Jan 31, 2020 217.09% = 10.85% × 20.02
Feb 1, 2019 63.50% = 6.71% × 9.47

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

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Feb 2, 2024 — = 8.94% × 2.07 × —
Feb 3, 2023 — = 6.63% × 2.22 × —
Jan 28, 2022 — = 8.77% × 2.16 × —
Jan 29, 2021 406.05% = 6.51% × 1.92 × 32.52
Jan 31, 2020 217.09% = 5.93% × 1.83 × 20.02
Feb 1, 2019 63.50% = 3.25% × 2.07 × 9.47

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

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Feb 2, 2024 — = 0.76 × 0.87 × 13.50% × 2.07 × —
Feb 3, 2023 — = 0.71 × 0.89 × 10.50% × 2.22 × —
Jan 28, 2022 — = 0.75 × 0.93 × 12.58% × 2.16 × —
Jan 29, 2021 406.05% = 0.75 × 0.90 × 9.61% × 1.92 × 32.52
Jan 31, 2020 217.09% = 0.76 × 0.89 × 8.79% × 1.83 × 20.02
Feb 1, 2019 63.50% = 0.68 × 0.84 × 5.67% × 2.07 × 9.47

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

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Feb 2, 2024 18.49% = 8.94% × 2.07
Feb 3, 2023 14.73% = 6.63% × 2.22
Jan 28, 2022 18.91% = 8.77% × 2.16
Jan 29, 2021 12.49% = 6.51% × 1.92
Jan 31, 2020 10.85% = 5.93% × 1.83
Feb 1, 2019 6.71% = 3.25% × 2.07

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

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Feb 2, 2024 18.49% = 0.76 × 0.87 × 13.50% × 2.07
Feb 3, 2023 14.73% = 0.71 × 0.89 × 10.50% × 2.22
Jan 28, 2022 18.91% = 0.75 × 0.93 × 12.58% × 2.16
Jan 29, 2021 12.49% = 0.75 × 0.90 × 9.61% × 1.92
Jan 31, 2020 10.85% = 0.76 × 0.89 × 8.79% × 1.83
Feb 1, 2019 6.71% = 0.68 × 0.84 × 5.67% × 2.07

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

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Feb 2, 2024 8.94% = 0.76 × 0.87 × 13.50%
Feb 3, 2023 6.63% = 0.71 × 0.89 × 10.50%
Jan 28, 2022 8.77% = 0.75 × 0.93 × 12.58%
Jan 29, 2021 6.51% = 0.75 × 0.90 × 9.61%
Jan 31, 2020 5.93% = 0.76 × 0.89 × 8.79%
Feb 1, 2019 3.25% = 0.68 × 0.84 × 5.67%

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.