Stock Analysis on Net
Stock Analysis on Net

NVIDIA Corp. (NASDAQ:NVDA)

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

NVIDIA Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jan 28, 2024 69.24% = 45.28% × 1.53
Jan 29, 2023 19.76% = 10.61% × 1.86
Jan 30, 2022 36.65% = 22.07% × 1.66
Jan 31, 2021 25.64% = 15.05% × 1.70
Jan 26, 2020 22.91% = 16.15% × 1.42
Jan 27, 2019 44.33% = 31.15% × 1.42

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

NVIDIA Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jan 28, 2024 69.24% = 48.85% × 0.93 × 1.53
Jan 29, 2023 19.76% = 16.19% × 0.65 × 1.86
Jan 30, 2022 36.65% = 36.23% × 0.61 × 1.66
Jan 31, 2021 25.64% = 25.98% × 0.58 × 1.70
Jan 26, 2020 22.91% = 25.61% × 0.63 × 1.42
Jan 27, 2019 44.33% = 35.34% × 0.88 × 1.42

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

NVIDIA Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jan 28, 2024 69.24% = 0.88 × 0.99 × 55.93% × 0.93 × 1.53
Jan 29, 2023 19.76% = 1.04 × 0.94 × 16.47% × 0.65 × 1.86
Jan 30, 2022 36.65% = 0.98 × 0.98 × 37.81% × 0.61 × 1.66
Jan 31, 2021 25.64% = 0.98 × 0.96 × 27.54% × 0.58 × 1.70
Jan 26, 2020 22.91% = 0.94 × 0.98 × 27.68% × 0.63 × 1.42
Jan 27, 2019 44.33% = 1.06 × 0.99 × 33.75% × 0.88 × 1.42

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in return on equity ratio (ROE) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.

Two-Component Disaggregation of ROA

NVIDIA Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jan 28, 2024 45.28% = 48.85% × 0.93
Jan 29, 2023 10.61% = 16.19% × 0.65
Jan 30, 2022 22.07% = 36.23% × 0.61
Jan 31, 2021 15.05% = 25.98% × 0.58
Jan 26, 2020 16.15% = 25.61% × 0.63
Jan 27, 2019 31.15% = 35.34% × 0.88

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

NVIDIA Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jan 28, 2024 45.28% = 0.88 × 0.99 × 55.93% × 0.93
Jan 29, 2023 10.61% = 1.04 × 0.94 × 16.47% × 0.65
Jan 30, 2022 22.07% = 0.98 × 0.98 × 37.81% × 0.61
Jan 31, 2021 15.05% = 0.98 × 0.96 × 27.54% × 0.58
Jan 26, 2020 16.15% = 0.94 × 0.98 × 27.68% × 0.63
Jan 27, 2019 31.15% = 1.06 × 0.99 × 33.75% × 0.88

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in return on assets ratio (ROA) over 2024 year is the increase in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

NVIDIA Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jan 28, 2024 48.85% = 0.88 × 0.99 × 55.93%
Jan 29, 2023 16.19% = 1.04 × 0.94 × 16.47%
Jan 30, 2022 36.23% = 0.98 × 0.98 × 37.81%
Jan 31, 2021 25.98% = 0.98 × 0.96 × 27.54%
Jan 26, 2020 25.61% = 0.94 × 0.98 × 27.68%
Jan 27, 2019 35.34% = 1.06 × 0.99 × 33.75%

Based on: 10-K (reporting date: 2024-01-28), 10-K (reporting date: 2023-01-29), 10-K (reporting date: 2022-01-30), 10-K (reporting date: 2021-01-31), 10-K (reporting date: 2020-01-26), 10-K (reporting date: 2019-01-27).

The primary reason for the increase in net profit margin ratio over 2024 year is the increase in operating profitability measured by EBIT margin ratio.