DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Capital Asset Pricing Model (CAPM)
- Net Profit Margin since 2020
- Price to Earnings (P/E) since 2020
- Price to Book Value (P/BV) since 2020
- Analysis of Debt
- Aggregate Accruals
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Two-Component Disaggregation of ROE
Airbnb Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
- Return on Assets (ROA)
- The Return on Assets exhibits a notable improvement over the periods observed. Initially, data is missing until the quarter ending December 31, 2021, where ROA was negative at -2.57%. From March 31, 2022, onward, the metric turns positive and follows a generally upward trajectory, peaking at 25.47% in December 31, 2023. Following this peak, ROA shows a gradual decline but remains strong, staying above 8% through June 30, 2025.
- Financial Leverage
- Financial Leverage ratios fluctuate throughout the periods without a clear long-term increasing or decreasing trend. The ratio ranged from a low of 2.35 at September 30, 2023, to a high of 4.56 at June 30, 2021. After peaking in mid-2021, leverage generally trends downward until late 2023, where it reaches its minimum, and then it begins to rise again through mid-2025, approaching levels around 3.47.
- Return on Equity (ROE)
- ROE also starts with missing data, then registers a negative value (-7.37%) at December 31, 2021. Subsequently, it improves significantly and reaches a peak of 62.55% at June 30, 2024. The metric exhibits considerable volatility, with a sharp decline following the peak, dropping to 21.65% by March 31, 2025. The recent quarters show a recovery, with ROE rising above 30% by mid-2025.
- Overall Patterns and Insights
- The data reveal a clear recovery and strengthening of asset efficiency and equity returns following the initial negative results in late 2021. The peak performance in ROA and ROE around late 2023 to mid-2024 indicates a period of increased profitability and operational efficiency. The simultaneous dip and partial recovery in financial leverage suggest adjustments in the capital structure possibly to optimize returns. Despite some volatility, the underlying trend in profitability metrics is positive, accompanied by managing leverage within a moderate range.
Three-Component Disaggregation of ROE
Airbnb Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
- Net Profit Margin
- The net profit margin exhibits a notable recovery starting from a negative figure of -5.88% in December 2021. From that point, it rises consistently, reaching a peak of 56.87% in December 2023. Following this peak, there is a decline, stabilizing around the low to mid-20% range by mid-2025. This suggests an initial period of losses followed by strong profitability and then some easing of profit intensity in the most recent quarters.
- Asset Turnover
- Asset turnover begins at 0.44 in March 2022 and displays moderate fluctuations over the observed periods. A slight dip occurs in mid-2023, followed by an increase toward the end of 2024 peaking at 0.53 in March 2025. The fluctuations indicate variability in how efficiently assets are utilized to generate revenue, but with a relatively stable ratio around the 0.4 to 0.5 mark.
- Financial Leverage
- Financial leverage shows volatility, ranging from a high of 4.56 in June 2021 to lows around 2.35 in September 2023. The leverage ratio significantly decreases after mid-2023, reaching lows below 2.6 before increasing again toward mid-2025 around 3.47. This pattern suggests changes in the company’s capital structure, with periods of higher indebtedness followed by deleveraging and then moderate re-leveraging.
- Return on Equity (ROE)
- ROE follows a trajectory similar to net profit margin, starting negative at -7.37% in December 2021 and sharply improving to a peak above 62% in December 2023. After this peak, ROE declines but remains strong, stabilizing in the 31% to 34% range throughout mid-2025. This demonstrates increased shareholder value creation over time, with a significant performance peak at year-end 2023 and subsequent normalization at still robust levels.
Two-Component Disaggregation of ROA
Airbnb Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31).
- Net Profit Margin
- The net profit margin exhibits a significant positive trend starting from a negative margin of -5.88% in December 2021 to reaching a peak of 56.87% in December 2023. Following this peak, there is a notable decline to lower but stable values around 22-24% in 2024 and mid-2025. The data indicates a period of strong profitability growth through 2021 to late 2023, followed by a normalization phase.
- Asset Turnover
- Asset turnover ratios are relatively stable with minor fluctuations across the observed periods. Beginning at 0.44 in December 2021, the ratio slightly dips to around 0.39 through mid-2022, then rises steadily, peaking at 0.53 in March 2025. The general pattern suggests consistent operational efficiency in asset utilization with some cyclical variations but no major structural shifts.
- Return on Assets (ROA)
- Return on Assets follows a trajectory resembling the net profit margin, starting from a negative -2.57% in December 2021 to a high of 25.47% in December 2023. Post-peak, ROA declines, stabilizing around 8-13% in 2024 and 2025. This trend reflects improving profitability and asset efficiency until late 2023, succeeded by a moderation phase consistent with the decline in net profit margin.