Stock Analysis on Net
Stock Analysis on Net

Union Pacific Corp. (NYSE:UNP)

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

Union Pacific Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 43.14% = 9.50% × 4.54
Dec 31, 2022 57.54% = 10.69% × 5.38
Dec 31, 2021 46.06% = 10.27% × 4.49
Dec 31, 2020 31.54% = 8.57% × 3.68
Dec 31, 2019 32.65% = 9.60% × 3.40

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.

Three-Component Disaggregation of ROE

Union Pacific Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 43.14% = 26.45% × 0.36 × 4.54
Dec 31, 2022 57.54% = 28.13% × 0.38 × 5.38
Dec 31, 2021 46.06% = 29.92% × 0.34 × 4.49
Dec 31, 2020 31.54% = 27.38% × 0.31 × 3.68
Dec 31, 2019 32.65% = 27.27% × 0.35 × 3.40

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.

Five-Component Disaggregation of ROE

Union Pacific Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 43.14% = 0.77 × 0.86 × 39.69% × 0.36 × 4.54
Dec 31, 2022 57.54% = 0.77 × 0.88 × 41.58% × 0.38 × 5.38
Dec 31, 2021 46.06% = 0.77 × 0.88 × 44.19% × 0.34 × 4.49
Dec 31, 2020 31.54% = 0.77 × 0.86 × 41.58% × 0.31 × 3.68
Dec 31, 2019 32.65% = 0.76 × 0.88 × 40.52% × 0.35 × 3.40

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in financial leverage ratio.

Two-Component Disaggregation of ROA

Union Pacific Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 9.50% = 26.45% × 0.36
Dec 31, 2022 10.69% = 28.13% × 0.38
Dec 31, 2021 10.27% = 29.92% × 0.34
Dec 31, 2020 8.57% = 27.38% × 0.31
Dec 31, 2019 9.60% = 27.27% × 0.35

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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

Union Pacific Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2023 9.50% = 0.77 × 0.86 × 39.69% × 0.36
Dec 31, 2022 10.69% = 0.77 × 0.88 × 41.58% × 0.38
Dec 31, 2021 10.27% = 0.77 × 0.88 × 44.19% × 0.34
Dec 31, 2020 8.57% = 0.77 × 0.86 × 41.58% × 0.31
Dec 31, 2019 9.60% = 0.76 × 0.88 × 40.52% × 0.35

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Union Pacific Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2023 26.45% = 0.77 × 0.86 × 39.69%
Dec 31, 2022 28.13% = 0.77 × 0.88 × 41.58%
Dec 31, 2021 29.92% = 0.77 × 0.88 × 44.19%
Dec 31, 2020 27.38% = 0.77 × 0.86 × 41.58%
Dec 31, 2019 27.27% = 0.76 × 0.88 × 40.52%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.