Stock Analysis on Net
Stock Analysis on Net

Procter & Gamble Co. (NYSE:PG)

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

Procter & Gamble Co., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jun 30, 2023 31.33% = 12.13% × 2.58
Jun 30, 2022 31.64% = 12.58% × 2.52
Jun 30, 2021 30.85% = 11.99% × 2.57
Jun 30, 2020 28.00% = 10.79% × 2.59
Jun 30, 2019 8.26% = 3.39% × 2.44
Jun 30, 2018 18.64% = 8.24% × 2.26

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Procter & Gamble Co., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jun 30, 2023 31.33% = 17.87% × 0.68 × 2.58
Jun 30, 2022 31.64% = 18.38% × 0.68 × 2.52
Jun 30, 2021 30.85% = 18.79% × 0.64 × 2.57
Jun 30, 2020 28.00% = 18.36% × 0.59 × 2.59
Jun 30, 2019 8.26% = 5.76% × 0.59 × 2.44
Jun 30, 2018 18.64% = 14.59% × 0.56 × 2.26

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Procter & Gamble Co., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jun 30, 2023 31.33% = 0.80 × 0.96 × 23.20% × 0.68 × 2.58
Jun 30, 2022 31.64% = 0.82 × 0.98 × 22.93% × 0.68 × 2.52
Jun 30, 2021 30.85% = 0.81 × 0.97 × 23.74% × 0.64 × 2.57
Jun 30, 2020 28.00% = 0.83 × 0.97 × 22.87% × 0.59 × 2.59
Jun 30, 2019 8.26% = 0.65 × 0.92 × 9.62% × 0.59 × 2.44
Jun 30, 2018 18.64% = 0.74 × 0.96 × 20.53% × 0.56 × 2.26

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

Procter & Gamble Co., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jun 30, 2023 12.13% = 17.87% × 0.68
Jun 30, 2022 12.58% = 18.38% × 0.68
Jun 30, 2021 11.99% = 18.79% × 0.64
Jun 30, 2020 10.79% = 18.36% × 0.59
Jun 30, 2019 3.39% = 5.76% × 0.59
Jun 30, 2018 8.24% = 14.59% × 0.56

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Procter & Gamble Co., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jun 30, 2023 12.13% = 0.80 × 0.96 × 23.20% × 0.68
Jun 30, 2022 12.58% = 0.82 × 0.98 × 22.93% × 0.68
Jun 30, 2021 11.99% = 0.81 × 0.97 × 23.74% × 0.64
Jun 30, 2020 10.79% = 0.83 × 0.97 × 22.87% × 0.59
Jun 30, 2019 3.39% = 0.65 × 0.92 × 9.62% × 0.59
Jun 30, 2018 8.24% = 0.74 × 0.96 × 20.53% × 0.56

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

Procter & Gamble Co., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jun 30, 2023 17.87% = 0.80 × 0.96 × 23.20%
Jun 30, 2022 18.38% = 0.82 × 0.98 × 22.93%
Jun 30, 2021 18.79% = 0.81 × 0.97 × 23.74%
Jun 30, 2020 18.36% = 0.83 × 0.97 × 22.87%
Jun 30, 2019 5.76% = 0.65 × 0.92 × 9.62%
Jun 30, 2018 14.59% = 0.74 × 0.96 × 20.53%

Based on: 10-K (reporting date: 2023-06-30), 10-K (reporting date: 2022-06-30), 10-K (reporting date: 2021-06-30), 10-K (reporting date: 2020-06-30), 10-K (reporting date: 2019-06-30), 10-K (reporting date: 2018-06-30).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in effect of taxes measured by tax burden ratio.