Stock Analysis on Net
Stock Analysis on Net

Walgreens Boots Alliance Inc. (NASDAQ:WBA)

This company has been moved to the archive! The financial data has not been updated since July 9, 2020.

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

Walgreens Boots Alliance Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Aug 31, 2019 16.94% = 5.89% × 2.88
Aug 31, 2018 19.32% = 7.37% × 2.62
Aug 31, 2017 14.85% = 6.18% × 2.40
Aug 31, 2016 13.97% = 5.74% × 2.43
Aug 31, 2015 13.67% = 6.14% × 2.23
Aug 31, 2014 9.44% = 5.20% × 1.82

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Walgreens Boots Alliance Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Aug 31, 2019 16.94% = 2.91% × 2.02 × 2.88
Aug 31, 2018 19.32% = 3.82% × 1.93 × 2.62
Aug 31, 2017 14.85% = 3.45% × 1.79 × 2.40
Aug 31, 2016 13.97% = 3.56% × 1.61 × 2.43
Aug 31, 2015 13.67% = 4.08% × 1.50 × 2.23
Aug 31, 2014 9.44% = 2.53% × 2.05 × 1.82

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Walgreens Boots Alliance Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Aug 31, 2019 16.94% = 0.87 × 0.87 × 3.85% × 2.02 × 2.88
Aug 31, 2018 19.32% = 0.83 × 0.91 × 5.05% × 1.93 × 2.62
Aug 31, 2017 14.85% = 0.84 × 0.87 × 4.68% × 1.79 × 2.40
Aug 31, 2016 13.97% = 0.81 × 0.90 × 4.91% × 1.61 × 2.43
Aug 31, 2015 13.67% = 0.80 × 0.90 × 5.69% × 1.50 × 2.23
Aug 31, 2014 9.44% = 0.56 × 0.96 × 4.73% × 2.05 × 1.82

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2019 year is the decrease in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

Walgreens Boots Alliance Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Aug 31, 2019 5.89% = 2.91% × 2.02
Aug 31, 2018 7.37% = 3.82% × 1.93
Aug 31, 2017 6.18% = 3.45% × 1.79
Aug 31, 2016 5.74% = 3.56% × 1.61
Aug 31, 2015 6.14% = 4.08% × 1.50
Aug 31, 2014 5.20% = 2.53% × 2.05

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Walgreens Boots Alliance Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Aug 31, 2019 5.89% = 0.87 × 0.87 × 3.85% × 2.02
Aug 31, 2018 7.37% = 0.83 × 0.91 × 5.05% × 1.93
Aug 31, 2017 6.18% = 0.84 × 0.87 × 4.68% × 1.79
Aug 31, 2016 5.74% = 0.81 × 0.90 × 4.91% × 1.61
Aug 31, 2015 6.14% = 0.80 × 0.90 × 5.69% × 1.50
Aug 31, 2014 5.20% = 0.56 × 0.96 × 4.73% × 2.05

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

Walgreens Boots Alliance Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Aug 31, 2019 2.91% = 0.87 × 0.87 × 3.85%
Aug 31, 2018 3.82% = 0.83 × 0.91 × 5.05%
Aug 31, 2017 3.45% = 0.84 × 0.87 × 4.68%
Aug 31, 2016 3.56% = 0.81 × 0.90 × 4.91%
Aug 31, 2015 4.08% = 0.80 × 0.90 × 5.69%
Aug 31, 2014 2.53% = 0.56 × 0.96 × 4.73%

Based on: 10-K (reporting date: 2019-08-31), 10-K (reporting date: 2018-08-31), 10-K (reporting date: 2017-08-31), 10-K (reporting date: 2016-08-31), 10-K (reporting date: 2015-08-31), 10-K (reporting date: 2014-08-31).

The primary reason for the decrease in net profit margin ratio over 2019 year is the decrease in operating profitability measured by EBIT margin ratio.