DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Enterprise Value to EBITDA (EV/EBITDA)
- Enterprise Value to FCFF (EV/FCFF)
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Analysis of Revenues
- Aggregate Accruals
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Two-Component Disaggregation of ROE
Walt Disney Co., decomposition of ROE (quarterly data)
Based on: 10-K (reporting date: 2025-09-27), 10-Q (reporting date: 2025-06-28), 10-Q (reporting date: 2025-03-29), 10-Q (reporting date: 2024-12-28), 10-K (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-Q (reporting date: 2023-12-30), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-Q (reporting date: 2022-01-01), 10-K (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-Q (reporting date: 2021-01-02).
- Return on Assets (ROA)
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The ROA exhibits a clear upward trend over the analyzed quarters. Initially, the company experienced negative returns with values of -2.45% and -2.25% in early 2021. A turnaround began mid-2021, where ROA moved into positive territory, reaching 0.56% by July 2021. From that point onward, ROA steadily increased, with minor fluctuations, eventually peaking at 6.28% in September 2025. This progression indicates a consistent improvement in asset efficiency and profitability over the period.
- Financial Leverage
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Financial leverage ratios show a gradual decline throughout the timeframe, starting at 2.40 in January 2021 and declining to 1.80 by September 2025. This steady decrease suggests a reduction in reliance on debt financing or other forms of leverage. The decrease in leverage could imply a more conservative capital structure, likely reducing financial risk and the cost of capital over time.
- Return on Equity (ROE)
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The ROE aligns with the improving profitability narrative, shifting from negative values in early 2021 (-5.89% and -5.28%) to positive figures by mid-2021 (1.30% in July). ROE progressed with some variability but maintained an overall upward trajectory, culminating at 11.29% by September 2025. The increasing ROE reflects enhanced shareholder value creation and effective use of equity capital.
- Overall Analysis
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The combined trends indicate a strategic improvement in profitability and financial health. The decline in financial leverage complements rising ROA and ROE figures, suggesting the company is generating higher returns with less dependence on debt. This shift may point to effective operational management and improved earnings quality. The simultaneous increase in returns coupled with decreasing leverage represents a strengthening financial position over the observed periods.
Three-Component Disaggregation of ROE
Walt Disney Co., decomposition of ROE (quarterly data)
Based on: 10-K (reporting date: 2025-09-27), 10-Q (reporting date: 2025-06-28), 10-Q (reporting date: 2025-03-29), 10-Q (reporting date: 2024-12-28), 10-K (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-Q (reporting date: 2023-12-30), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-Q (reporting date: 2022-01-01), 10-K (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-Q (reporting date: 2021-01-02).
- Net Profit Margin
- The net profit margin exhibits a positive trend overall, beginning with negative values in early 2021 (-8.15% and -7.73%) and transitioning to consistent positive margins from mid-2021 onward. The margin shows gradual improvement with minor fluctuations, reaching as high as 13.14% by the end of the observed period in late 2025. Notable dips occur briefly around mid-2023 and early 2024, yet the general trajectory is an increasing profitability margin.
- Asset Turnover
- Asset turnover demonstrates steady improvement throughout the timeline. Starting at 0.30 in early 2021, it increases incrementally to 0.48 by late 2025. This indicates enhanced efficiency in utilizing assets to generate revenue over the quarters, with no significant volatility observed. The steady rise reflects gradual operational improvements or increased revenue relative to the asset base.
- Financial Leverage
- Financial leverage displays a consistent downward trend over the period. Beginning at 2.4, the ratio decreases to 1.8 by late 2025. This decline suggests a reduction in the relative amount of debt used to finance the company’s assets or an increase in equity, indicating a more conservative capital structure or deleveraging strategy over time.
- Return on Equity (ROE)
- The return on equity follows a similar positive trend to net profit margin, beginning with negative returns in early 2021 and shifting to positive values by mid-2021. ROE increases steadily with some minor fluctuations, reaching 11.29% by the end of the dataset. This overall upward movement highlights improving profitability for shareholders and efficient use of equity capital.
Two-Component Disaggregation of ROA
Walt Disney Co., decomposition of ROA (quarterly data)
Based on: 10-K (reporting date: 2025-09-27), 10-Q (reporting date: 2025-06-28), 10-Q (reporting date: 2025-03-29), 10-Q (reporting date: 2024-12-28), 10-K (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-Q (reporting date: 2023-12-30), 10-K (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-Q (reporting date: 2022-12-31), 10-K (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-Q (reporting date: 2022-01-01), 10-K (reporting date: 2021-10-02), 10-Q (reporting date: 2021-07-03), 10-Q (reporting date: 2021-04-03), 10-Q (reporting date: 2021-01-02).
- Net Profit Margin
- The net profit margin demonstrates a marked improvement over the analyzed period. Initially, the margin was negative, with values of -8.15% and -7.73% in early 2021, indicating financial challenges. Starting mid-2021, the margin shifted to positive territory, exhibiting a steady increase with some fluctuations. From around 4% in early 2022, it fluctuated modestly before a more pronounced upward trend beginning in late 2023, reaching 13.14% by the third quarter of 2025. This upward trajectory suggests enhanced profitability and operational efficiency over time.
- Asset Turnover
- Asset turnover showed consistent and gradual improvement throughout the periods. Beginning at 0.30 in early 2021, the ratio increased steadily, reflecting a more efficient use of assets to generate revenue. By mid-2025, the asset turnover ratio reached 0.48, indicating nearly a 60% increase from the start of the period. This gradual increase suggests ongoing operational enhancements and better asset utilization.
- Return on Assets (ROA)
- Return on Assets improved from negative values early in 2021 (-2.45% and -2.25%) to positive values, mirroring the trend seen in net profit margin and asset turnover. The ROA increased steadily, with some variability, indicating improving overall profitability relative to the company’s asset base. By mid-2025, ROA reached 6.28%, representing a significant recovery and growth compared to the beginning of the observed timeframe. The improvement suggests that the company is generating more earnings per unit of assets employed.
- Overall Trends and Insights
- Across all three key financial ratios, there is a clear and consistent pattern of improvement from early 2021 through mid-2025. The transition from negative to positive net profitability and returns indicates successful strategic or operational initiatives. The gradual rise in asset turnover corroborates enhanced operational efficiency. The interplay of these metrics reflects stronger profitability supported by better asset management, signaling a healthier financial position and potentially more effective management practices over time.