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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Lowe’s Cos. Inc. pages available for free this week:
- Balance Sheet: Assets
- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Earnings (P/E) since 2005
- Aggregate Accruals
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Two-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | |||
| Feb 2, 2024 | = | × | |||
| Feb 3, 2023 | = | × | |||
| Jan 28, 2022 | = | × | |||
| Jan 29, 2021 | = | × | |||
| Jan 31, 2020 | = | × |
Based on: 10-K (reporting date: 2025-01-31), 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).
Three-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | × | ||||
| Feb 2, 2024 | = | × | × | ||||
| Feb 3, 2023 | = | × | × | ||||
| Jan 28, 2022 | = | × | × | ||||
| Jan 29, 2021 | = | × | × | ||||
| Jan 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2025-01-31), 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).
Five-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
Based on: 10-K (reporting date: 2025-01-31), 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).
Two-Component Disaggregation of ROA
Lowe’s Cos. Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | |||
| Feb 2, 2024 | = | × | |||
| Feb 3, 2023 | = | × | |||
| Jan 28, 2022 | = | × | |||
| Jan 29, 2021 | = | × | |||
| Jan 31, 2020 | = | × |
Based on: 10-K (reporting date: 2025-01-31), 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).
The primary reason for the decrease in return on assets ratio (ROA) over 2025 year is the decrease 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 | |
|---|---|---|---|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | × | × | |||||
| Feb 2, 2024 | = | × | × | × | |||||
| Feb 3, 2023 | = | × | × | × | |||||
| Jan 28, 2022 | = | × | × | × | |||||
| Jan 29, 2021 | = | × | × | × | |||||
| Jan 31, 2020 | = | × | × | × |
Based on: 10-K (reporting date: 2025-01-31), 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).
The primary reason for the decrease in return on assets ratio (ROA) over 2025 year is the decrease in efficiency measured by asset turnover 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 | |
|---|---|---|---|---|---|---|---|
| Jan 31, 2025 | = | × | × | ||||
| Feb 2, 2024 | = | × | × | ||||
| Feb 3, 2023 | = | × | × | ||||
| Jan 28, 2022 | = | × | × | ||||
| Jan 29, 2021 | = | × | × | ||||
| Jan 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2025-01-31), 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).
The primary reason for the decrease in net profit margin ratio over 2025 year is the decrease in operating profitability measured by EBIT margin ratio.