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DuPont Analysis: Decomposition of ROE
Difficulty: Beginner
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in profitability measured by Return on Assets (ROA).
Three-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Leverage | |
|---|---|---|---|---|---|---|---|
| Nov 30, 2018 | |
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| Dec 1, 2017 | |
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| Dec 2, 2016 | |
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| Nov 27, 2015 | |
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| Nov 28, 2014 | |
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| Nov 29, 2013 | |
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Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in profitability measured by Net Profit Margin.
Five-Component Disaggregation of ROE
Adobe Inc., decomposition of ROE
| ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Leverage | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Nov 30, 2018 | |
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| Dec 1, 2017 | |
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| Dec 2, 2016 | |
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| Nov 27, 2015 | |
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| Nov 28, 2014 | |
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| Nov 29, 2013 | |
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Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in effect of taxes measured by Tax Burden.
Two-Way Decomposition of ROA
Adobe Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Nov 30, 2018 | |
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| Dec 1, 2017 | |
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| Dec 2, 2016 | |
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| Nov 27, 2015 | |
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| Nov 28, 2014 | |
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| Nov 29, 2013 | |
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Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Return on Assets (ROA) over 2018 year is the increase in profitability measured by Net Profit Margin.
Four-Way Decomposition of ROA
Adobe Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Nov 30, 2018 | |
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| Dec 1, 2017 | |
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| Dec 2, 2016 | |
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| Nov 27, 2015 | |
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| Nov 28, 2014 | |
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| Nov 29, 2013 | |
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Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Return on Assets (ROA) over 2018 year is the increase in effect of taxes measured by Tax Burden.
Decomposition of Net Profit Margin
Adobe Inc., decomposition of Net Profit Margin
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Nov 30, 2018 | |
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| Dec 1, 2017 | |
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| Dec 2, 2016 | |
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| Nov 27, 2015 | |
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| Nov 28, 2014 | |
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| Nov 29, 2013 | |
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Based on: 10-K (filing date: 2019-01-25), 10-K (filing date: 2018-01-22), 10-K (filing date: 2017-01-20), 10-K (filing date: 2016-01-19), 10-K (filing date: 2015-01-20), 10-K (filing date: 2014-01-21).
The primary reason for the increase in Net Profit Margin over 2018 year is the increase in effect of taxes measured by Tax Burden.