Microsoft Excel LibreOffice Calc

DuPont Analysis: Decomposition of ROE

Difficulty: Beginner


Two-Component Disaggregation of ROE

Amgen Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Leverage
Dec 31, 2017 7.84% 2.48% 3.17
Dec 31, 2016 25.85% 9.95% 2.60
Dec 31, 2015 24.71% 9.69% 2.55
Dec 31, 2014 20.01% 7.47% 2.68
Dec 31, 2013 23.00% 7.68% 2.99

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in profitability measured by Return on Assets (ROA).


Three-Component Disaggregation of ROE

Amgen Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Leverage
Dec 31, 2017 7.84% 9.08% 0.27 3.17
Dec 31, 2016 25.85% 35.27% 0.28 2.60
Dec 31, 2015 24.71% 33.13% 0.29 2.55
Dec 31, 2014 20.01% 26.69% 0.28 2.68
Dec 31, 2013 23.00% 27.93% 0.28 2.99

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in profitability measured by Net Profit Margin.


Five-Component Disaggregation of ROE

Amgen Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Dec 31, 2017 7.84% 0.21 0.88 50.02% 0.27 3.17
Dec 31, 2016 25.85% 0.84 0.88 47.61% 0.28 2.60
Dec 31, 2015 24.71% 0.87 0.88 43.32% 0.29 2.55
Dec 31, 2014 20.01% 0.92 0.84 34.44% 0.28 2.68
Dec 31, 2013 23.00% 0.97 0.84 34.56% 0.28 2.99

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in effect of taxes measured by Tax Burden.


Two-Way Decomposition of ROA

Amgen Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2017 2.48% 9.08% 0.27
Dec 31, 2016 9.95% 35.27% 0.28
Dec 31, 2015 9.69% 33.13% 0.29
Dec 31, 2014 7.47% 26.69% 0.28
Dec 31, 2013 7.68% 27.93% 0.28

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Return on Assets (ROA) over 2017 year is the decrease in profitability measured by Net Profit Margin.


Four-Way Decomposition of ROA

Amgen Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2017 2.48% 0.21 0.88 50.02% 0.27
Dec 31, 2016 9.95% 0.84 0.88 47.61% 0.28
Dec 31, 2015 9.69% 0.87 0.88 43.32% 0.29
Dec 31, 2014 7.47% 0.92 0.84 34.44% 0.28
Dec 31, 2013 7.68% 0.97 0.84 34.56% 0.28

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Return on Assets (ROA) over 2017 year is the decrease in effect of taxes measured by Tax Burden.


Decomposition of Net Profit Margin

Amgen Inc., decomposition of Net Profit Margin

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2017 9.08% 0.21 0.88 50.02%
Dec 31, 2016 35.27% 0.84 0.88 47.61%
Dec 31, 2015 33.13% 0.87 0.88 43.32%
Dec 31, 2014 26.69% 0.92 0.84 34.44%
Dec 31, 2013 27.93% 0.97 0.84 34.56%

Based on: 10-K (filing date: 2018-02-13), 10-K (filing date: 2017-02-14), 10-K (filing date: 2016-02-16), 10-K (filing date: 2015-02-19), 10-K (filing date: 2014-02-24).

The primary reason for the decrease in Net Profit Margin over 2017 year is the decrease in effect of taxes measured by Tax Burden.