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: 2025-06-28), 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).
The analysis of the financial ratios over the specified periods reveals several notable trends. The Return on Assets (ROA) initially fluctuates moderately, reaching a peak around April 2022 at 13.96%, followed by a steady decline to negative territory starting in early 2023. This negative trend continues and deepens through mid-2025, indicating decreasing asset profitability.
Financial Leverage remains relatively stable throughout the periods, fluctuating slightly around an average near 1.8. Minor variations are observed but no extreme spikes or drops occur. This indicates a generally consistent use of debt relative to equity over time.
The Return on Equity (ROE) demonstrates a pattern similar to ROA, starting with positive values but declining significantly from late 2022 onward. It moves into negative figures by early 2023 and deteriorates further to around -21% by mid-2025, reflecting diminishing shareholder returns and possibly increased net losses or lower net income in relation to equity.
- Return on Assets (ROA)
- Initially stable with slight variability, peaking at nearly 14% in April 2022.
- Marked decline to negative values beginning in early 2023, deepening through 2025.
- This trend indicates reduced efficiency in generating profits from assets over time.
- Financial Leverage
- Maintains consistency around 1.8 with minor fluctuations.
- No significant increase or decrease, suggesting stable capital structure policies.
- Return on Equity (ROE)
- Starts positive but declines sharply from late 2022 onward.
- Turns negative by early 2023 and worsens substantially by 2025.
- This downward trajectory implies diminished profitability available to equity holders and potential financial challenges.
Overall, the data reflect an environment where profitability ratios have deteriorated significantly after mid-2022, despite a stable financial leverage ratio. The weakening ROA and ROE suggest operational and net income challenges impacting returns, although leverage policies remain unchanged. This scenario may indicate underlying issues affecting earnings and asset utilization efficiency that require further investigation.
Three-Component Disaggregation of ROE
Intel Corp., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-28), 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).
The analysis of the quarterly financial ratios reveals significant shifts over the observed periods, highlighting trends in profitability, efficiency, and leverage.
- Net Profit Margin
- The net profit margin exhibited strong profitability in the early periods, peaking at 31.68% in April 2022. Following that peak, a consistent decline occurred, turning negative starting in April 2023 and reaching increasingly negative values, with the lowest point at -38.64% in June 2025. This downward trend suggests increasing challenges in maintaining profitability over time, possibly due to rising costs, declining revenues, or other operational difficulties.
- Asset Turnover
- Asset turnover showed a gradual but steady decrease from 0.52 in March 2021 to approximately 0.28 by mid-2025. This decline indicates a reduction in the company's efficiency in generating sales from its assets, suggesting assets may be underutilized or that revenue generation has slowed relative to asset base growth.
- Financial Leverage
- Financial leverage ratios remained relatively stable with minor fluctuations, staying between approximately 1.68 and 1.98. There is a slight increase toward the later periods, signaling a modest increase in the use of debt or other liabilities to finance assets. However, the change is not dramatic, so leverage appears to be managed within a consistent range.
- Return on Equity (ROE)
- ROE initially fluctuated around the low-to-mid twenties percentile, mirroring net profit margin trends, but experienced a sharp decline starting in early 2023. It turned negative and deteriorated steadily, reaching -20.95% by June 2025. The drop in ROE aligns with the falling profitability and asset utilization, indicating diminished returns for shareholders and potentially increased financial stress.
Overall, the financial indicators point to a period of declining operational performance and profitability, coupled with reduced asset efficiency and relatively stable but slightly increasing leverage. The negative trends in net profit margin and ROE are particularly concerning and warrant further investigation into underlying causes and potential corrective measures.
Two-Component Disaggregation of ROA
Intel Corp., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-06-28), 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).
The analysis of the quarterly financial ratios reveals several noteworthy trends in the company’s profitability and efficiency metrics over the examined periods.
- Net Profit Margin (%)
- The net profit margin exhibited a generally strong position in the early quarters, peaking at 31.68% in April 2022. However, from that point onwards, there is a discernible downward trajectory. Margins declined sharply from 19.13% in October 2022 to negative figures starting April 2023, reaching as low as -38.64% by June 2025. This indicates a significant and sustained loss-making phase in the most recent periods.
- Asset Turnover (ratio)
- Asset turnover has steadily decreased over the entire period. Starting at 0.52 in March 2021, it gradually fell to a low of 0.27-0.28 in the latest quarters. This trend suggests a diminishing efficiency in utilizing assets to generate sales, reflecting potentially slower revenue generation relative to asset base growth or asset accumulation without proportional sales increases.
- Return on Assets (ROA) (%)
- The return on assets followed a pattern similar to net profit margin. Initially stable and relatively strong with values around 12%, it fell to negative territory starting April 2023. The percentage decreased further reaching about -10.65% by June 2025. This indicates declining profitability in relation to the assets employed, signaling impaired overall operational efficiency and profitability.
In summary, the company’s financial performance has shown a marked deterioration from mid-2022 onward. Both profitability margins and efficiency ratios have weakened significantly. The negative profit margins and ROA in the latter periods reflect operational challenges or market conditions adversely affecting the company's earnings and asset utilization. The declining asset turnover corroborates this by indicating reduced ability to generate sales from assets. This combination points to critical issues impacting financial health and warrants further investigation into underlying causes and corrective measures.