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Facebook Inc. (FB)

DuPont Analysis: Decomposition of ROE

Difficulty: Beginner

  • Annual Data
  • Quarterly Data

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

    Two-Component Disaggregation of ROE

    Facebook Inc., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = ROA × Leverage
    Dec 31, 2017 21.43% 18.85% 1.14
    Dec 31, 2016 17.26% 15.73% 1.10
    Dec 31, 2015 8.34% 7.46% 1.12
    Dec 31, 2014 8.14% 7.32% 1.11
    Dec 31, 2013 9.70% 8.38% 1.16

    Source: Based on data from Facebook Inc. Annual Reports

     

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

    Three-Component Disaggregation of ROE

    Facebook Inc., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = Net Profit Margin × Asset Turnover × Leverage
    Dec 31, 2017 21.43% 39.20% 0.48 1.14
    Dec 31, 2016 17.26% 36.97% 0.43 1.10
    Dec 31, 2015 8.34% 20.57% 0.36 1.12
    Dec 31, 2014 8.14% 23.58% 0.31 1.11
    Dec 31, 2013 9.70% 19.05% 0.44 1.16

    Source: Based on data from Facebook Inc. Annual Reports

     

    The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in efficiency measured by Asset Turnover.

    Five-Component Disaggregation of ROE

    Facebook Inc., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
    Dec 31, 2017 21.43% 0.77 1.00 50.67% 0.48 1.14
    Dec 31, 2016 17.26% 0.82 1.00 45.33% 0.43 1.10
    Dec 31, 2015 8.34% 0.60 1.00 34.68% 0.36 1.12
    Dec 31, 2014 8.14% 0.60 1.00 39.57% 0.31 1.11
    Dec 31, 2013 9.70% 0.54 0.98 35.70% 0.44 1.16

    Source: Based on data from Facebook Inc. Annual Reports

     

    The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in efficiency measured by Asset Turnover.

    Two-Way Decomposition of ROA

    Facebook Inc., decomposition of ROA

    Microsoft Excel LibreOffice Calc
    ROA = Net Profit Margin × Asset Turnover
    Dec 31, 2017 18.85% 39.20% 0.48
    Dec 31, 2016 15.73% 36.97% 0.43
    Dec 31, 2015 7.46% 20.57% 0.36
    Dec 31, 2014 7.32% 23.58% 0.31
    Dec 31, 2013 8.38% 19.05% 0.44

    Source: Based on data from Facebook Inc. Annual Reports

     

    The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in Asset Turnover.

    Four-Way Decomposition of ROA

    Facebook Inc., decomposition of ROA

    Microsoft Excel LibreOffice Calc
    ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
    Dec 31, 2017 18.85% 0.77 1.00 50.67% 0.48
    Dec 31, 2016 15.73% 0.82 1.00 45.33% 0.43
    Dec 31, 2015 7.46% 0.60 1.00 34.68% 0.36
    Dec 31, 2014 7.32% 0.60 1.00 39.57% 0.31
    Dec 31, 2013 8.38% 0.54 0.98 35.70% 0.44

    Source: Based on data from Facebook Inc. Annual Reports

     

    The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in efficiency measured by Asset Turnover.

    Decomposition of Net Profit Margin

    Facebook Inc., decomposition of Net Profit Margin

    Microsoft Excel LibreOffice Calc
    Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
    Dec 31, 2017 39.20% 0.77 1.00 50.67%
    Dec 31, 2016 36.97% 0.82 1.00 45.33%
    Dec 31, 2015 20.57% 0.60 1.00 34.68%
    Dec 31, 2014 23.58% 0.60 1.00 39.57%
    Dec 31, 2013 19.05% 0.54 0.98 35.70%

    Source: Based on data from Facebook Inc. Annual Reports

     

    The primary reason for the increase in Net Profit Margin over 2017 year is the increase in operating profitability measured by EBIT Margin.