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Canadian Natural Resources Ltd. (CNQ) | DuPont Analysis: Decomposition of ROE

Decomposing ROE involves expressing net income divided by shareholders' equity as the product of component ratios.

Two-Component Disaggregation of ROE

Canadian Natural Resources Ltd., decomposition of ROE

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	ROE	=	ROA	×	Leverage

Dec 31, 2012	7.79%		3.86%		2.02
Dec 31, 2011	11.54%		5.59%		2.06
Dec 31, 2010	8.21%		3.89%		2.11
Dec 31, 2009	8.13%		3.85%		2.11
Dec 31, 2008	27.13%		11.69%		2.32

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Return on Equity (ROE) over 2012 year is the decrease in profitability measured by Return on Assets (ROA).

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Three-Component Disaggregation of ROE

Canadian Natural Resources Ltd., decomposition of ROE

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	ROE	=	Net Profit Margin	×	Asset Turnover	×	Leverage

Dec 31, 2012	7.79%		11.68%		0.33		2.02
Dec 31, 2011	11.54%		17.04%		0.33		2.06
Dec 31, 2010	8.21%		11.68%		0.33		2.11
Dec 31, 2009	8.13%		14.26%		0.27		2.11
Dec 31, 2008	27.13%		30.82%		0.38		2.32

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Return on Equity (ROE) over 2012 year is the decrease in profitability measured by Net Profit Margin.

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Five-Component Disaggregation of ROE

Canadian Natural Resources Ltd., decomposition of ROE

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	ROE	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover	×	Leverage

Dec 31, 2012	7.79%		0.73		0.88		18.36%		0.33		2.02
Dec 31, 2011	11.54%		0.68		0.91		27.71%		0.33		2.06
Dec 31, 2010	8.21%		0.58		0.86		23.13%		0.33		2.11
Dec 31, 2009	8.13%		0.85		0.82		20.57%		0.27		2.11
Dec 31, 2008	27.13%		0.70		0.98		44.65%		0.38		2.32

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Return on Equity (ROE) over 2012 year is the decrease in operating profitability measured by EBIT Margin.

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Two-Way Decomposition of ROA

Canadian Natural Resources Ltd., decomposition of ROA

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	ROA	=	Net Profit Margin	×	Asset Turnover

Dec 31, 2012	3.86%		11.68%		0.33
Dec 31, 2011	5.59%		17.04%		0.33
Dec 31, 2010	3.89%		11.68%		0.33
Dec 31, 2009	3.85%		14.26%		0.27
Dec 31, 2008	11.69%		30.82%		0.38

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Return on Assets (ROA) over 2012 year is the decrease in profitability measured by Net Profit Margin.

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Four-Way Decomposition of ROA

Canadian Natural Resources Ltd., decomposition of ROA

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	ROA	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover

Dec 31, 2012	3.86%		0.73		0.88		18.36%		0.33
Dec 31, 2011	5.59%		0.68		0.91		27.71%		0.33
Dec 31, 2010	3.89%		0.58		0.86		23.13%		0.33
Dec 31, 2009	3.85%		0.85		0.82		20.57%		0.27
Dec 31, 2008	11.69%		0.70		0.98		44.65%		0.38

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Return on Assets (ROA) over 2012 year is the decrease in operating profitability measured by EBIT Margin.

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Decomposition of Net Profit Margin

Canadian Natural Resources Ltd., decomposition of Net Profit Margin

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	Net Profit Margin	=	Tax Burden	×	Interest Burden	×	EBIT Margin

Dec 31, 2012	11.68%		0.73		0.88		18.36%
Dec 31, 2011	17.04%		0.68		0.91		27.71%
Dec 31, 2010	11.68%		0.58		0.86		23.13%
Dec 31, 2009	14.26%		0.85		0.82		20.57%
Dec 31, 2008	30.82%		0.70		0.98		44.65%

Source: Based on data from Canadian Natural Resources Ltd. Annual Reports

The primary reason for the decrease in Net Profit Margin over 2012 year is the decrease in operating profitability measured by EBIT Margin.

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