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.
Two-Component Disaggregation of ROE
Intel Corp., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-03-29), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-25), 10-Q (reporting date: 2021-06-26), 10-Q (reporting date: 2021-03-27), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).
The analysis of the quarterly data reveals several notable trends in the financial performance and structure over the observed periods.
- Return on Assets (ROA)
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Initially, ROA demonstrated relatively strong performance, peaking around the early periods with values exceeding 12%. However, a gradual decline is evident starting from late 2021. By the end of the series, ROA turns negative, dipping below -9%, which indicates diminishing efficiency in utilizing assets to generate profit. The decline is relatively sharp in the last few quarters, signifying increasing challenges in asset profitability.
- Financial Leverage
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Financial leverage remained fairly stable throughout the entire period. Starting around 1.93, it fluctuated within a narrow range between approximately 1.68 and 1.98. This consistency suggests a relatively stable debt-to-equity financing structure, with no indications of significant shifts in capital structure risk or reliance on debt.
- Return on Equity (ROE)
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The Return on Equity followed a pattern similar to ROA, with strong positive returns in earlier periods peaking near 25%. Over time, ROE exhibited a downward trend, dropping substantially into negative territory by the end of the periods under review. The decline is particularly steep in the latter quarters, falling past -19%, which indicates a considerable erosion in shareholder value generation and overall profitability relative to equity.
Overall, the data indicates that while leverage has remained steady, both asset and equity returns have deteriorated significantly, turning negative in the most recent quarters. This trend raises concerns about profitability and operational effectiveness, suggesting the company may be facing heightened costs, lower revenues, or other adverse financial conditions impacting return metrics negatively.
Three-Component Disaggregation of ROE
Intel Corp., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-03-29), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-25), 10-Q (reporting date: 2021-06-26), 10-Q (reporting date: 2021-03-27), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).
The analysis of the quarterly financial data reveals several notable trends in the key financial ratios over the observed periods.
- Net Profit Margin (%)
- The net profit margin shows a fluctuating pattern with a general decline towards the later periods. Initially, the margin is strong, peaking at 31.68% in July 2022. Following this peak, the margin declines sharply, becoming negative starting in the first quarter of 2023 and reaching significantly negative values by the end of 2024 and early 2025, with margins around -35%. This suggests increasing challenges in profitability and potentially rising costs or declining revenue efficiency.
- Asset Turnover (ratio)
- Asset turnover exhibits a steady downward trend from 0.51 in early 2021 to approximately 0.27-0.28 in late 2024 and early 2025. The consistent decrease over time indicates a reduced efficiency in utilizing assets to generate revenue. This decline may reflect diminishing operational effectiveness or shifts in asset base composition.
- Financial Leverage (ratio)
- Financial leverage ratios remain relatively stable within a narrow range between approximately 1.68 and 1.98 throughout the entire timeline. There are minor fluctuations, but no marked upward or downward trend. This stability suggests a consistent approach to financing policy without significant changes in the use of debt relative to equity.
- Return on Equity (ROE) (%)
- Return on equity declines from a healthy range in 2021, starting around 25.79%, to negative territory beginning in early 2023. The trend follows a similar pattern to net profit margin, showing deteriorating profitability from shareholder perspective with ROE dropping to approximately -19% by the end of 2024 and early 2025. This indicates that the company is generating less profit per unit of equity and may be encountering operational or market difficulties.
Overall, the trends suggest that despite stable financial leverage, the company has faced declining operational efficiency and profitability over the observed periods, culminating in substantial negative returns in the most recent quarters. These patterns warrant further investigation into drivers such as cost management, revenue trends, and strategic adjustments.
Two-Component Disaggregation of ROA
Intel Corp., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-03-29), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-28), 10-Q (reporting date: 2024-06-29), 10-Q (reporting date: 2024-03-30), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-07-01), 10-Q (reporting date: 2023-04-01), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-10-01), 10-Q (reporting date: 2022-07-02), 10-Q (reporting date: 2022-04-02), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-25), 10-Q (reporting date: 2021-06-26), 10-Q (reporting date: 2021-03-27), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-26), 10-Q (reporting date: 2020-06-27), 10-Q (reporting date: 2020-03-28).
The quarterly financial data demonstrates several notable trends across the key performance metrics over the observed periods.
- Net Profit Margin
- The net profit margin exhibits a fluctuating pattern, initially showing strong positive margins of around 23-27% in 2020 and early 2021. However, starting in 2022, there is a marked decline, with the margin decreasing steadily throughout 2022 and into 2023. By late 2023 and into 2024, the margin turns negative, reaching substantial losses approaching -35% by early 2025. This indicates deteriorating profitability over time, with a transition from solid profits to significant losses.
- Asset Turnover
- The asset turnover ratio shows a gradual decline throughout the observed timeframe. From about 0.51-0.52 in 2020 and early 2021, the ratio steadily decreases each quarter, dropping to approximately 0.27-0.29 in the later periods through 2024 and early 2025. This trend indicates decreasing efficiency in using assets to generate revenue, suggesting either asset base increases without proportional revenue growth or declining sales relative to assets.
- Return on Assets (ROA)
- The return on assets follows a similar downward trajectory. Initially strong and positive in 2020 and early 2021, ranging between roughly 12-14%, it declines notably in subsequent quarters. By 2022, ROA approaches near zero or slightly negative values, and it worsens further in 2024 and early 2025, reaching negative double-digit percentages near -10%. This reflects declining profitability relative to the company's assets, consistent with the reductions seen in net profit margin and asset turnover.
Overall, the trends suggest that over this multi-year period, the company experienced significant erosion in profitability and operational efficiency. Both the margin and asset utilization metrics deteriorate consistently, culminating in negative returns and large losses in recent quarters. The data points to challenges in maintaining profit levels while effectively leveraging assets, highlighting areas of concern for financial performance going forward.