Stock Analysis on Net
Stock Analysis on Net

Medtronic PLC (NYSE:MDT)

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

Medtronic PLC, decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Apr 26, 2024 7.32% = 4.09% × 1.79
Apr 28, 2023 7.30% = 4.13% × 1.77
Apr 29, 2022 9.59% = 5.54% × 1.73
Apr 30, 2021 7.01% = 3.87% × 1.81
Apr 24, 2020 9.44% = 5.28% × 1.79
Apr 26, 2019 9.25% = 5.16% × 1.79

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

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

Medtronic PLC, decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Apr 26, 2024 7.32% = 11.36% × 0.36 × 1.79
Apr 28, 2023 7.30% = 12.03% × 0.34 × 1.77
Apr 29, 2022 9.59% = 15.90% × 0.35 × 1.73
Apr 30, 2021 7.01% = 11.97% × 0.32 × 1.81
Apr 24, 2020 9.44% = 16.56% × 0.32 × 1.79
Apr 26, 2019 9.25% = 15.16% × 0.34 × 1.79

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

Medtronic PLC, decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Apr 26, 2024 7.32% = 0.76 × 0.87 × 17.08% × 0.36 × 1.79
Apr 28, 2023 7.30% = 0.70 × 0.89 × 19.13% × 0.34 × 1.77
Apr 29, 2022 9.59% = 0.92 × 0.91 × 19.08% × 0.35 × 1.73
Apr 30, 2021 7.01% = 0.93 × 0.81 × 15.92% × 0.32 × 1.81
Apr 24, 2020 9.44% = 1.19 × 0.79 × 17.74% × 0.32 × 1.79
Apr 26, 2019 9.25% = 0.89 × 0.78 × 21.67% × 0.34 × 1.79

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

Medtronic PLC, decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Apr 26, 2024 4.09% = 11.36% × 0.36
Apr 28, 2023 4.13% = 12.03% × 0.34
Apr 29, 2022 5.54% = 15.90% × 0.35
Apr 30, 2021 3.87% = 11.97% × 0.32
Apr 24, 2020 5.28% = 16.56% × 0.32
Apr 26, 2019 5.16% = 15.16% × 0.34

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

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

Medtronic PLC, decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Apr 26, 2024 4.09% = 0.76 × 0.87 × 17.08% × 0.36
Apr 28, 2023 4.13% = 0.70 × 0.89 × 19.13% × 0.34
Apr 29, 2022 5.54% = 0.92 × 0.91 × 19.08% × 0.35
Apr 30, 2021 3.87% = 0.93 × 0.81 × 15.92% × 0.32
Apr 24, 2020 5.28% = 1.19 × 0.79 × 17.74% × 0.32
Apr 26, 2019 5.16% = 0.89 × 0.78 × 21.67% × 0.34

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

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

Medtronic PLC, decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Apr 26, 2024 11.36% = 0.76 × 0.87 × 17.08%
Apr 28, 2023 12.03% = 0.70 × 0.89 × 19.13%
Apr 29, 2022 15.90% = 0.92 × 0.91 × 19.08%
Apr 30, 2021 11.97% = 0.93 × 0.81 × 15.92%
Apr 24, 2020 16.56% = 1.19 × 0.79 × 17.74%
Apr 26, 2019 15.16% = 0.89 × 0.78 × 21.67%

Based on: 10-K (reporting date: 2024-04-26), 10-K (reporting date: 2023-04-28), 10-K (reporting date: 2022-04-29), 10-K (reporting date: 2021-04-30), 10-K (reporting date: 2020-04-24), 10-K (reporting date: 2019-04-26).

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.