DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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- Income Statement
- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Long-term (Investment) Activity Ratios
- Price to FCFE (P/FCFE)
- Dividend Discount Model (DDM)
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
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Two-Component Disaggregation of ROE
Applied Materials Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Oct 27, 2024 | = | × | |||
| Oct 29, 2023 | = | × | |||
| Oct 30, 2022 | = | × | |||
| Oct 31, 2021 | = | × | |||
| Oct 25, 2020 | = | × | |||
| Oct 27, 2019 | = | × |
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in profitability measured by return on assets ratio (ROA).
Three-Component Disaggregation of ROE
Applied Materials Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Oct 27, 2024 | = | × | × | ||||
| Oct 29, 2023 | = | × | × | ||||
| Oct 30, 2022 | = | × | × | ||||
| Oct 31, 2021 | = | × | × | ||||
| Oct 25, 2020 | = | × | × | ||||
| Oct 27, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in efficiency measured by asset turnover ratio.
Five-Component Disaggregation of ROE
Applied Materials Inc., decomposition of ROE
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the decrease in return on equity ratio (ROE) over 2024 year is the decrease in efficiency measured by asset turnover ratio.
Two-Component Disaggregation of ROA
Applied Materials Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Oct 27, 2024 | = | × | |||
| Oct 29, 2023 | = | × | |||
| Oct 30, 2022 | = | × | |||
| Oct 31, 2021 | = | × | |||
| Oct 25, 2020 | = | × | |||
| Oct 27, 2019 | = | × |
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in asset turnover ratio.
Four-Component Disaggregation of ROA
Applied Materials Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Oct 27, 2024 | = | × | × | × | |||||
| Oct 29, 2023 | = | × | × | × | |||||
| Oct 30, 2022 | = | × | × | × | |||||
| Oct 31, 2021 | = | × | × | × | |||||
| Oct 25, 2020 | = | × | × | × | |||||
| Oct 27, 2019 | = | × | × | × |
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the decrease in return on assets ratio (ROA) over 2024 year is the decrease in efficiency measured by asset turnover ratio.
Disaggregation of Net Profit Margin
Applied Materials Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Oct 27, 2024 | = | × | × | ||||
| Oct 29, 2023 | = | × | × | ||||
| Oct 30, 2022 | = | × | × | ||||
| Oct 31, 2021 | = | × | × | ||||
| Oct 25, 2020 | = | × | × | ||||
| Oct 27, 2019 | = | × | × |
Based on: 10-K (reporting date: 2024-10-27), 10-K (reporting date: 2023-10-29), 10-K (reporting date: 2022-10-30), 10-K (reporting date: 2021-10-31), 10-K (reporting date: 2020-10-25), 10-K (reporting date: 2019-10-27).
The primary reason for the increase in net profit margin ratio over 2024 year is the increase in operating profitability measured by EBIT margin ratio.