Stock Analysis on Net
Stock Analysis on Net

Alphabet Inc. (NASDAQ:GOOG)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Quarterly Data

Microsoft Excel

Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.

Two-Component Disaggregation of ROE

Alphabet Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 26.04% = 18.34% × 1.42
Sep 30, 2023 24.43% = 16.82% × 1.45
Jun 30, 2023 22.82% = 15.91% × 1.43
Mar 31, 2023 22.46% = 15.86% × 1.42
Dec 31, 2022 23.41% = 16.42% × 1.43
Sep 30, 2022 26.41% = 18.70% × 1.41
Jun 30, 2022 28.20% = 20.28% × 1.39
Mar 31, 2022 29.35% = 20.87% × 1.41
Dec 31, 2021 30.22% = 21.16% × 1.43
Sep 30, 2021 28.87% = 20.33% × 1.42
Jun 30, 2021 26.49% = 18.76% × 1.41
Mar 31, 2021 22.33% = 15.70% × 1.42
Dec 31, 2020 18.09% = 12.60% × 1.44
Sep 30, 2020 16.77% = 11.93% × 1.41
Jun 30, 2020 15.21% = 11.32% × 1.34
Mar 31, 2020 16.95% = 12.63% × 1.34
Dec 31, 2019 17.05% = 12.45% × 1.37
Sep 30, 2019 — = — × 1.35
Jun 30, 2019 — = — × 1.34
Mar 31, 2019 — = — × 1.34

Based on: 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), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2023 is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Alphabet Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 26.04% = 24.01% × 0.76 × 1.42
Sep 30, 2023 24.43% = 22.46% × 0.75 × 1.45
Jun 30, 2023 22.82% = 21.05% × 0.76 × 1.43
Mar 31, 2023 22.46% = 20.58% × 0.77 × 1.42
Dec 31, 2022 23.41% = 21.20% × 0.77 × 1.43
Sep 30, 2022 26.41% = 23.75% × 0.79 × 1.41
Jun 30, 2022 28.20% = 25.89% × 0.78 × 1.39
Mar 31, 2022 29.35% = 27.57% × 0.76 × 1.41
Dec 31, 2021 30.22% = 29.51% × 0.72 × 1.43
Sep 30, 2021 28.87% = 29.52% × 0.69 × 1.42
Jun 30, 2021 26.49% = 28.57% × 0.66 × 1.41
Mar 31, 2021 22.33% = 26.11% × 0.60 × 1.42
Dec 31, 2020 18.09% = 22.06% × 0.57 × 1.44
Sep 30, 2020 16.77% = 20.80% × 0.57 × 1.41
Jun 30, 2020 15.21% = 18.99% × 0.60 × 1.34
Mar 31, 2020 16.95% = 20.71% × 0.61 × 1.34
Dec 31, 2019 17.05% = 21.22% × 0.59 × 1.37
Sep 30, 2019 — = — × — × 1.35
Jun 30, 2019 — = — × — × 1.34
Mar 31, 2019 — = — × — × 1.34

Based on: 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), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2023 is the increase in profitability measured by net profit margin ratio.

Two-Component Disaggregation of ROA

Alphabet Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 18.34% = 24.01% × 0.76
Sep 30, 2023 16.82% = 22.46% × 0.75
Jun 30, 2023 15.91% = 21.05% × 0.76
Mar 31, 2023 15.86% = 20.58% × 0.77
Dec 31, 2022 16.42% = 21.20% × 0.77
Sep 30, 2022 18.70% = 23.75% × 0.79
Jun 30, 2022 20.28% = 25.89% × 0.78
Mar 31, 2022 20.87% = 27.57% × 0.76
Dec 31, 2021 21.16% = 29.51% × 0.72
Sep 30, 2021 20.33% = 29.52% × 0.69
Jun 30, 2021 18.76% = 28.57% × 0.66
Mar 31, 2021 15.70% = 26.11% × 0.60
Dec 31, 2020 12.60% = 22.06% × 0.57
Sep 30, 2020 11.93% = 20.80% × 0.57
Jun 30, 2020 11.32% = 18.99% × 0.60
Mar 31, 2020 12.63% = 20.71% × 0.61
Dec 31, 2019 12.45% = 21.22% × 0.59
Sep 30, 2019 — = — × —
Jun 30, 2019 — = — × —
Mar 31, 2019 — = — × —

Based on: 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), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the increase in return on assets ratio (ROA) over Q4 2023 is the increase in profitability measured by net profit margin ratio.