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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- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Price to FCFE (P/FCFE)
- Return on Assets (ROA) since 2008
- Total Asset Turnover since 2008
- Aggregate Accruals
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Two-Component Disaggregation of ROE
Visa Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Sep 30, 2022 | = | × | |||
| Sep 30, 2021 | = | × | |||
| Sep 30, 2020 | = | × | |||
| Sep 30, 2019 | = | × | |||
| Sep 30, 2018 | = | × | |||
| Sep 30, 2017 | = | × |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by return on assets ratio (ROA).
Three-Component Disaggregation of ROE
Visa Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2022 | = | × | × | ||||
| Sep 30, 2021 | = | × | × | ||||
| Sep 30, 2020 | = | × | × | ||||
| Sep 30, 2019 | = | × | × | ||||
| Sep 30, 2018 | = | × | × | ||||
| Sep 30, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in efficiency measured by asset turnover ratio.
Five-Component Disaggregation of ROE
Visa Inc., decomposition of ROE
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in efficiency measured by asset turnover ratio.
Two-Component Disaggregation of ROA
Visa Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Sep 30, 2022 | = | × | |||
| Sep 30, 2021 | = | × | |||
| Sep 30, 2020 | = | × | |||
| Sep 30, 2019 | = | × | |||
| Sep 30, 2018 | = | × | |||
| Sep 30, 2017 | = | × |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in asset turnover ratio.
Four-Component Disaggregation of ROA
Visa Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2022 | = | × | × | × | |||||
| Sep 30, 2021 | = | × | × | × | |||||
| Sep 30, 2020 | = | × | × | × | |||||
| Sep 30, 2019 | = | × | × | × | |||||
| Sep 30, 2018 | = | × | × | × | |||||
| Sep 30, 2017 | = | × | × | × |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in efficiency measured by asset turnover ratio.
Disaggregation of Net Profit Margin
Visa Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2022 | = | × | × | ||||
| Sep 30, 2021 | = | × | × | ||||
| Sep 30, 2020 | = | × | × | ||||
| Sep 30, 2019 | = | × | × | ||||
| Sep 30, 2018 | = | × | × | ||||
| Sep 30, 2017 | = | × | × |
Based on: 10-K (reporting date: 2022-09-30), 10-K (reporting date: 2021-09-30), 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30).
The primary reason for the decrease in net profit margin ratio over 2022 year is the decrease in operating profitability measured by EBIT margin ratio.