Stock Analysis on Net
Stock Analysis on Net

Diageo PLC (NYSE:DEO)

This company has been moved to the archive! The financial data has not been updated since August 12, 2014.

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

Diageo PLC, decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jun 30, 2014 32.95% = 9.79% × 3.37
Jun 30, 2013 35.32% = 9.91% × 3.56
Jun 30, 2012 34.75% = 8.69% × 4.00
Jun 30, 2011 36.22% = 9.61% × 3.77
Jun 30, 2010 40.65% = 8.37% × 4.86
Jun 30, 2009 50.33% = 8.96% × 5.62

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2014 year is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

Diageo PLC, decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jun 30, 2014 32.95% = 16.08% × 0.61 × 3.37
Jun 30, 2013 35.32% = 16.05% × 0.62 × 3.56
Jun 30, 2012 34.75% = 13.31% × 0.65 × 4.00
Jun 30, 2011 36.22% = 14.36% × 0.67 × 3.77
Jun 30, 2010 40.65% = 12.57% × 0.67 × 4.86
Jun 30, 2009 50.33% = 13.20% × 0.68 × 5.62

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2014 year is the decrease in financial leverage ratio.

Five-Component Disaggregation of ROE

Diageo PLC, decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jun 30, 2014 32.95% = 0.83 × 0.82 × 23.37% × 0.61 × 3.37
Jun 30, 2013 35.32% = 0.82 × 0.82 × 23.68% × 0.62 × 3.56
Jun 30, 2012 34.75% = 0.65 × 0.82 × 24.83% × 0.65 × 4.00
Jun 30, 2011 36.22% = 0.85 × 0.78 × 21.84% × 0.67 × 3.77
Jun 30, 2010 40.65% = 0.77 × 0.71 × 22.77% × 0.67 × 4.86
Jun 30, 2009 50.33% = 0.85 × 0.71 × 21.83% × 0.68 × 5.62

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2014 year is the decrease in financial leverage ratio.

Two-Component Disaggregation of ROA

Diageo PLC, decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jun 30, 2014 9.79% = 16.08% × 0.61
Jun 30, 2013 9.91% = 16.05% × 0.62
Jun 30, 2012 8.69% = 13.31% × 0.65
Jun 30, 2011 9.61% = 14.36% × 0.67
Jun 30, 2010 8.37% = 12.57% × 0.67
Jun 30, 2009 8.96% = 13.20% × 0.68

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the decrease in return on assets ratio (ROA) over 2014 year is the decrease in asset turnover ratio.

Four-Component Disaggregation of ROA

Diageo PLC, decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jun 30, 2014 9.79% = 0.83 × 0.82 × 23.37% × 0.61
Jun 30, 2013 9.91% = 0.82 × 0.82 × 23.68% × 0.62
Jun 30, 2012 8.69% = 0.65 × 0.82 × 24.83% × 0.65
Jun 30, 2011 9.61% = 0.85 × 0.78 × 21.84% × 0.67
Jun 30, 2010 8.37% = 0.77 × 0.71 × 22.77% × 0.67
Jun 30, 2009 8.96% = 0.85 × 0.71 × 21.83% × 0.68

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the decrease in return on assets ratio (ROA) over 2014 year is the decrease in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Diageo PLC, decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jun 30, 2014 16.08% = 0.83 × 0.82 × 23.37%
Jun 30, 2013 16.05% = 0.82 × 0.82 × 23.68%
Jun 30, 2012 13.31% = 0.65 × 0.82 × 24.83%
Jun 30, 2011 14.36% = 0.85 × 0.78 × 21.84%
Jun 30, 2010 12.57% = 0.77 × 0.71 × 22.77%
Jun 30, 2009 13.20% = 0.85 × 0.71 × 21.83%

Based on: 20-F (reporting date: 2014-06-30), 20-F (reporting date: 2013-06-30), 20-F (reporting date: 2012-06-30), 20-F (reporting date: 2011-06-30), 20-F (reporting date: 2010-06-30), 20-F (reporting date: 2009-06-30).

The primary reason for the increase in net profit margin ratio over 2014 year is the increase in effect of taxes measured by tax burden ratio.