Decomposing ROE involves expressing net income divided by shareholders' equity as the product of component ratios.
Two-Component Disaggregation of ROE
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International Business Machines Corp., decomposition of ROE
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the increase in Return on Equity (ROE) over 2011 year is the increase in Financial Leverage.
Three-Component Disaggregation of ROE
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International Business Machines Corp., decomposition of ROE
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the increase in Return on Equity (ROE) over 2011 year is the increase in Financial Leverage.
Five-Component Disaggregation of ROE
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International Business Machines Corp., decomposition of ROE
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the increase in Return on Equity (ROE) over 2011 year is the increase in Financial Leverage.
Two-Way Decomposition of ROA
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International Business Machines Corp., decomposition of ROA
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the increase in Return on Assets (ROA) over 2011 year is the increase in Asset Turnover.
Four-Way Decomposition of ROA
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International Business Machines Corp., decomposition of ROA
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the increase in Return on Assets (ROA) over 2011 year is the increase in efficiency measured by Asset Turnover.
Decomposition of Net Profit Margin
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International Business Machines Corp., decomposition of Net Profit Margin
Source: Based on data from International Business Machines Corp. Annual Reports
The primary reason for the decrease in Net Profit Margin over 2011 year is the decrease in operating profitability measured by EBIT Margin.
