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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Two-Component Disaggregation of ROE
Expand Energy Corp., decomposition of ROE (quarterly data)
Based on: 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 ROA data initiates with missing values for the early periods but becomes available starting from March 31, 2022. At this point, ROA shows significant volatility, with a notably high value of 57.48% followed by a sharp decline to -0.86% in the next quarter. Subsequently, ROA trends upward, reaching a peak of 48.58% by June 30, 2023. Following this peak, the ROA exhibits a consistent downward trajectory through subsequent periods, declining to negative values of -2.56% by the quarter ending March 31, 2025. This indicates a deterioration in asset profitability in the latest periods, after a strong performance phase in 2022 and early 2023.
- Financial Leverage
- Financial leverage registers steady growth from March 31, 2021, starting at 1.78 and peaking at 2.47 by March 31, 2022. After this peak, leverage declines notably through 2022 and stabilizes around 1.31 to 1.39 from December 31, 2022, into late 2024. A slight increase appears at the end of the period, reaching 1.62 by March 31, 2025. The pattern indicates an initial increase in leverage followed by a period of deleveraging or stabilization, and a minor uptick in the latest quarter.
- Return on Equity (ROE)
- ROE follows a pattern broadly similar to ROA but with more pronounced peaks and troughs. Starting in March 31, 2022, it jumps sharply to 111.59%, drops to negative -2.12% the following quarter, and then climbs steadily to a high of 68.94% by June 30, 2023. After this peak, ROE declines progressively, mirroring the trend seen in ROA, falling into negative territory (-4.06% and -5.75%) by the first quarter of 2025. This suggests volatility in equity returns with a substantial decrease in profitability in recent quarters.
- Overall Trend and Insights
- The financial data reflects significant fluctuations in the company's profitability metrics (ROA and ROE) over the observed quarters. Both metrics exhibit exceptional highs in the 2022–mid-2023 period, followed by consistent declines, ultimately turning negative by early 2025. Financial leverage increased initially but then steadily declined, stabilizing at lower levels before a slight rise at the end. The decline in ROA and ROE alongside stable or slightly increasing leverage in the latest quarters could indicate challenges in generating returns from assets and equity relative to the capital structure. The negative returns in 2025 are a signal of deteriorating financial performance, potentially requiring management attention to improve asset utilization and equity value generation.
Three-Component Disaggregation of ROE
Expand Energy Corp., decomposition of ROE (quarterly data)
Based on: 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 significant fluctuations over the analyzed periods. Initially, there is no data for the first several quarters, but from March 31, 2022, onward, the margin shows a recovery from a negative value (-1.32%) to a peak of 68.67% by December 31, 2023. Following this peak, a downward trend is apparent, with the margin declining sharply to negative figures by March 31, 2025 (-16.76% and -15.06%). This indicates considerable volatility in profitability, with strong performance periods followed by notable losses.
- Asset Turnover
- Asset turnover starts with moderate values around 0.66-0.96 in the early periods where data is available. The ratio reaches a high point of 0.96 at the end of 2021, suggesting efficient use of assets to generate sales during that time. However, from March 31, 2023, there is a consistent and marked decline in asset turnover, dropping to as low as 0.15 by March 31, 2025, before slightly increasing to 0.24. This trend implies a reduced efficiency in asset utilization over recent periods.
- Financial Leverage
- Financial leverage demonstrates variability with an overall moderate range from 1.31 to 2.47. The values peak around March 31, 2022 (2.47), indicating higher use of debt or other liabilities relative to equity at that point. Subsequently, leverage gradually declines and stabilizes around 1.3-1.6 for the last several quarters observed. This suggests a conservative capital structure towards the later periods, with relatively less reliance on debt financing in comparison to the start of the series.
- Return on Equity (ROE)
- The return on equity closely follows the trend of net profit margin, with initial absence of data and subsequent sharp swings. It peaks at 111.59% at March 31, 2022, reflecting exceptional returns to shareholders during this period. However, similar to net profit margin, ROE decreases significantly after hitting the peak, moving into modest positive territory before turning negative in the final two quarters (-4.06% and -5.75%). This variability points to volatile earnings generation relative to shareholder equity and possibly changing underlying profitability drivers.
Five-Component Disaggregation of ROE
Expand Energy Corp., decomposition of ROE (quarterly data)
Based on: 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).
- Tax Burden
- The tax burden ratio exhibits notable fluctuations across the periods observed. Initially absent in the first quarters, it records values slightly above or near 1.00 in 2021 and early 2022, indicating occasional tax-related anomalies or credits. A peak occurs in early 2023 with ratios around 1.35 and subsequently decreases to approximately 0.78 through mid-2024 before stabilizing around 0.81. This pattern may suggest variability in effective tax rates or unusual tax events influencing net income relative to pre-tax income.
- Interest Burden
- This ratio remains relatively stable throughout the observed quarters, fluctuating narrowly between 0.80 and 0.99. The steady trend indicates consistent interest expense relative to EBIT over time, with a slight decreasing tendency from mid-2023 onward, which could imply minor improvements in interest cost management or declining interest expenses as a proportion of operating income.
- EBIT Margin
- The EBIT margin shows high volatility with a significant dip into negative territory around mid-2021 (-1.35%) and again sharply negative at the end of 2024 and start of 2025 (approximately -16.8% and -15.7%). Positive margins dominate other periods, peaking sharply at over 59% in late 2022 and early 2023, indicating periods of strong operational profitability. However, the overall trend from late 2022 toward 2025 reflects a consistent decline, suggesting deteriorating earnings quality or rising costs reducing operational profitability near the end of the timeline.
- Asset Turnover
- Asset turnover trends downward after 2021, starting around 0.66 and slightly improving to near 0.96 at the end of 2021, indicating efficient asset use early on. Subsequently, it declines steadily throughout 2022 to below 0.25 by early 2025. This significant reduction reflects diminishing efficiency in utilizing assets to generate revenue, possibly due to asset base expansion, declining sales, or both.
- Financial Leverage
- Financial leverage rises from 1.78 in early 2021 to a peak above 2.4 in mid-2022, indicating increased use of debt relative to equity. Following this peak, the ratio declines steadily to just above 1.3 through 2024, with a slight resurgence in early 2025 reaching about 1.62. This movement suggests an initial increase in leverage, followed by deleveraging efforts or equity growth, and a modest uptick indicating renewed borrowing or reduced equity in late periods.
- Return on Equity (ROE)
- ROE experiences extreme variability, marked by extremely high positive values in late 2021 and early 2022, peaking above 111%. This spikes aligns with elevated EBIT margins and leverage. Subsequently, ROE decreases substantially, entering negative territory towards the end of 2024 and early 2025 (-4.06% and -5.75%), reflecting declining profitability and possibly combined effects of reduced margins and asset turnover. The pattern indicates a transition from exceptional profitability to deteriorating returns for equity holders over the examined period.
Two-Component Disaggregation of ROA
Expand Energy Corp., decomposition of ROA (quarterly data)
Based on: 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 started appearing in the data from March 31, 2022, at a notably high value of 86.67%. However, the margin immediately declined sharply to -1.32% in the following quarter (June 30, 2022) before recovering to positive territory in subsequent quarters. Between September 2022 and December 2023, the margin showed a generally upward trend, peaking at 68.67% in December 2023. After this peak, there was a clear downward trajectory; the margin decreased substantially, falling to negative values again by the first quarter of 2025, reaching -15.06%.
- Asset Turnover
- Asset turnover data begins at March 31, 2022, with a ratio of 0.66, which remained relatively stable in the early quarters, marginally increasing to 0.96 by December 2022. From this point onwards, the ratio consistently declined over the subsequent quarters, dropping steadily to 0.15 by March 31, 2025, with a slight uptick to 0.24 in December 2024 before the final decline.
- Return on Assets (ROA)
- Return on assets fluctuated alongside net profit margin, starting at 57.48% in March 31, 2022. Following a dip to a negative value of -0.86% in June 2022, ROA improved to positive figures, peaking at 48.58% in June 2023. From mid-2023 onward, ROA demonstrated a gradual but steady decline, reaching negative territory again by the first quarter of 2025 at -3.54%.
- Overall Observations
- The financial performance indicated by these key profitability and efficiency ratios displays significant volatility post the first quarter of 2022. Initially, very high profitability and return levels suggest a period of exceptional performance, followed by a sharp downturn and some recovery. Asset utilization efficiency, as indicated by asset turnover, peaks during late 2022 but undergoes a protracted decline thereafter. Both profitability and ROA trends mirror each other closely, indicating that the company's earnings capacity relative to its assets weakened notably towards early 2025. The decline in asset turnover suggests deteriorating efficiency in generating sales from asset investments, which may be a contributing factor to the observed downturn in profitability measures.
Four-Component Disaggregation of ROA
Expand Energy Corp., decomposition of ROA (quarterly data)
Based on: 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).
- Tax Burden
- The tax burden ratio shows fluctuations over the periods for which data is available. Starting from slightly above 1.00 in early 2021, it remains close to or just above unity throughout 2022, with a peak around 1.35 in the first quarter of 2023. Subsequently, the ratio declines to around 0.78 during the first half of 2024 before slightly increasing again towards the end of 2024. This indicates variability in tax expenses relative to pre-tax earnings, with occasional periods of tax credits or benefits given ratios below 1.
- Interest Burden
- The interest burden ratio displays a generally stable and slightly declining trend over the reported quarters. Beginning near 0.99 in early observations of 2021, the ratio dips progressively to about 0.80 by the last quarter of 2024. This trend suggests a gradual reduction in interest expenses relative to earnings before interest and taxes (EBIT), indicating possible improvements in interest cost management or reduced debt levels over time.
- EBIT Margin
- EBIT margin exhibits high volatility. It starts with a significant figure of 86.37% in the first reported quarter and then plunges to a negative 1.35% in the middle of 2021. Across the subsequent periods until the end of 2023, the margin rises steadily, peaking at 59.37% in late 2022, before declining again. The margin decreases sharply into negative territory by the end of 2024, with the most recent two quarters showing margins around -16% to -15%. This pattern indicates a period of fluctuating operational profitability, with marked improvements followed by a notable downturn in the latest periods.
- Asset Turnover
- Asset turnover ratio reflects a clear downward trend after an initial increase. It increases from 0.66 to a peak of 0.96 in late 2021 and early 2022, implying more efficient asset utilization during that time. However, from mid-2022 onwards, the ratio declines steadily, reaching a low of 0.15 in the third quarter of 2024 before a slight recovery to 0.24 by the end of 2024. This diminishing asset turnover suggests a weakening in the efficiency of using assets to generate revenue over the later periods.
- Return on Assets (ROA)
- ROA follows a trajectory consistent with other profitability metrics, starting positively at 57.48% in early 2021, dipping briefly negative, then recovering to peak at 48.58% in mid-2022. After this peak, ROA declines progressively to negative values by the end of 2024, with the last two quarters indicating a negative return of approximately -2.56% and -3.54%. This trend highlights deteriorating overall asset profitability, with early strong returns giving way to losses in the latest periods.
- Summary
- Overall, the company experienced volatility in profitability and operational efficiency over the examined quarters. Initial periods demonstrate strong operational margins, asset utilization, and returns on assets, accompanied by manageable tax and interest burdens. However, from mid-2023 onwards, there is a clear decline in profitability and efficiency, as seen in shrinking EBIT margins, reduced asset turnover, and negative returns on assets. Meanwhile, the interest burden has gradually decreased, potentially signaling improved financing conditions even as operational challenges increased. The tax burden fluctuates but tends to stay near unity, indicating relatively stable tax impacts on earnings over time. The data suggest a need for strategic review given the downward trends in profitability and asset productivity in the most recent periods.
Disaggregation of Net Profit Margin
Expand Energy Corp., decomposition of net profit margin ratio (quarterly data)
Based on: 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).
- Tax Burden
- The tax burden ratio shows notable fluctuations across the observed periods. Initially, the ratio is slightly above 1.0 in early 2022, indicating a tax burden slightly exceeding earnings before taxes in some quarters. It then dips below 1.0 in late 2022, suggesting a temporary reduction in relative tax expense, before rising again and stabilizing around 0.78 to 0.81 during the first three quarters of 2024. This downward trend in recent periods signals a decreasing tax impact relative to pre-tax earnings over time.
- Interest Burden
- The interest burden ratio remains relatively stable throughout the entire period analyzed. Starting near 0.99 in early 2022, it marginally declines to 0.8 by December 2024. This gradual decrease indicates a slow but steady reduction in interest expense relative to earnings before interest and taxes, reflecting potentially improved interest cost management or reduced debt servicing requirements.
- EBIT Margin
- The EBIT margin exhibits considerable volatility. It begins with a sharp negative value around mid-2021, highlighting a loss at the operating income level at that time. Subsequently, there is a significant recovery and improvement through 2022 and early 2023, peaking above 59% in late 2023. However, this positive trend reverses starting in 2024, with the margin declining sharply to negative values by the end of 2024 and early 2025. The pattern suggests a period of strong operational profitability followed by a substantial downturn.
- Net Profit Margin
- The net profit margin closely tracks the pattern observed in the EBIT margin, displaying large swings. Early in the data, negative profitability is evident, followed by a strong rebound with peak values in late 2023 exceeding 68%. Thereafter, the margin declines significantly in 2024, turning negative toward the end of the period. This trajectory indicates that net profitability was improving significantly through early 2023 but experienced a marked deterioration subsequently, aligning with the downturn in operating results.