Stock Analysis on Net
Stock Analysis on Net

Micron Technology Inc. (NASDAQ:MU)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin

Microsoft Excel

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

Two-Component Disaggregation of ROE

Micron Technology Inc., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Aug 31, 2023 -13.22% = -9.08% × 1.46
Sep 1, 2022 17.41% = 13.11% × 1.33
Sep 2, 2021 13.34% = 9.96% × 1.34
Sep 3, 2020 6.89% = 5.01% × 1.38
Aug 29, 2019 17.59% = 12.91% × 1.36
Aug 30, 2018 43.77% = 32.59% × 1.34

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Micron Technology Inc., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Aug 31, 2023 -13.22% = -37.54% × 0.24 × 1.46
Sep 1, 2022 17.41% = 28.24% × 0.46 × 1.33
Sep 2, 2021 13.34% = 21.16% × 0.47 × 1.34
Sep 3, 2020 6.89% = 12.54% × 0.40 × 1.38
Aug 29, 2019 17.59% = 26.97% × 0.48 × 1.36
Aug 30, 2018 43.77% = 46.51% × 0.70 × 1.34

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).

The primary reason for the decrease in return on equity ratio (ROE) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Micron Technology Inc., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Aug 31, 2023 -13.22% = — × — × -33.90% × 0.24 × 1.46
Sep 1, 2022 17.41% = 0.91 × 0.98 × 31.74% × 0.46 × 1.33
Sep 2, 2021 13.34% = 0.94 × 0.97 × 23.24% × 0.47 × 1.34
Sep 3, 2020 6.89% = 0.91 × 0.94 × 14.75% × 0.40 × 1.38
Aug 29, 2019 17.59% = 0.90 × 0.98 × 30.48% × 0.48 × 1.36
Aug 30, 2018 43.77% = 0.99 × 0.98 × 48.19% × 0.70 × 1.34

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).

Two-Component Disaggregation of ROA

Micron Technology Inc., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Aug 31, 2023 -9.08% = -37.54% × 0.24
Sep 1, 2022 13.11% = 28.24% × 0.46
Sep 2, 2021 9.96% = 21.16% × 0.47
Sep 3, 2020 5.01% = 12.54% × 0.40
Aug 29, 2019 12.91% = 26.97% × 0.48
Aug 30, 2018 32.59% = 46.51% × 0.70

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Micron Technology Inc., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Aug 31, 2023 -9.08% = — × — × -33.90% × 0.24
Sep 1, 2022 13.11% = 0.91 × 0.98 × 31.74% × 0.46
Sep 2, 2021 9.96% = 0.94 × 0.97 × 23.24% × 0.47
Sep 3, 2020 5.01% = 0.91 × 0.94 × 14.75% × 0.40
Aug 29, 2019 12.91% = 0.90 × 0.98 × 30.48% × 0.48
Aug 30, 2018 32.59% = 0.99 × 0.98 × 48.19% × 0.70

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).

Disaggregation of Net Profit Margin

Micron Technology Inc., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Aug 31, 2023 -37.54% = — × — × -33.90%
Sep 1, 2022 28.24% = 0.91 × 0.98 × 31.74%
Sep 2, 2021 21.16% = 0.94 × 0.97 × 23.24%
Sep 3, 2020 12.54% = 0.91 × 0.94 × 14.75%
Aug 29, 2019 26.97% = 0.90 × 0.98 × 30.48%
Aug 30, 2018 46.51% = 0.99 × 0.98 × 48.19%

Based on: 10-K (reporting date: 2023-08-31), 10-K (reporting date: 2022-09-01), 10-K (reporting date: 2021-09-02), 10-K (reporting date: 2020-09-03), 10-K (reporting date: 2019-08-29), 10-K (reporting date: 2018-08-30).