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.
Paying user area
Try for free
PepsiCo Inc. pages available for free this week:
- Statement of Comprehensive Income
- Analysis of Long-term (Investment) Activity Ratios
- Analysis of Reportable Segments
- Analysis of Geographic Areas
- Enterprise Value to FCFF (EV/FCFF)
- Capital Asset Pricing Model (CAPM)
- Operating Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to PepsiCo Inc. for $24.99.
This is a one-time payment. There is no automatic renewal.
We accept:
Two-Component Disaggregation of ROE
PepsiCo Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-03-22), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-07), 10-Q (reporting date: 2024-06-15), 10-Q (reporting date: 2024-03-23), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-09), 10-Q (reporting date: 2023-06-17), 10-Q (reporting date: 2023-03-25), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-03), 10-Q (reporting date: 2022-06-11), 10-Q (reporting date: 2022-03-19), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-04), 10-Q (reporting date: 2021-06-12), 10-Q (reporting date: 2021-03-20), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-05), 10-Q (reporting date: 2020-06-13), 10-Q (reporting date: 2020-03-21).
- Return on Assets (ROA)
- The Return on Assets demonstrates an overall positive trend starting from 7.66% at the end of 2020. It increased steadily through 2021, peaking at 10.93% in mid-2022, followed by minor fluctuations around 9% to 10% in late 2022 and through 2023. Into 2024, the ROA remains relatively stable, maintaining levels close to or above 9%, indicating consistent efficiency in asset utilization.
- Financial Leverage
- Financial Leverage exhibits a declining trend from values above 6.3 in early 2020 to below 5.0 by late 2022, suggesting a reduction in the company's use of debt relative to equity during this period. From late 2022 onward, the ratio shows minor volatility but stays around 5.1 to 5.5, reflecting a relatively stable leverage position while remaining lower than earlier in the period.
- Return on Equity (ROE)
- The Return on Equity shows an initially high level near 53% in the first half of 2021, followed by a gradual decline to approximately 38.62% by the first quarter of 2023. Thereafter, ROE recovers somewhat, fluctuating in the mid-40% to low-50% range through the remainder of 2023 and into 2024, ending near 51% by early 2025. This pattern suggests variability in profitability relative to shareholder equity, with a notable dip and subsequent recovery.
- Insights and Summary
- Over the observed periods, asset efficiency, as measured by ROA, has improved and stabilized at a healthy level, implying strong operational performance. Concurrently, the company appears to have deleveraged considerably, reducing financial risk by lowering its financial leverage ratio. The ROE trends mirror these dynamics, reflecting shifts in profitability amidst changing leverage and asset efficiency. The combination of stable ROA and moderate leverage suggests a balanced approach to risk and return, while fluctuations in ROE point to varying shareholder returns influenced by both operational results and capital structure adjustments.
Three-Component Disaggregation of ROE
PepsiCo Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-03-22), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-07), 10-Q (reporting date: 2024-06-15), 10-Q (reporting date: 2024-03-23), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-09), 10-Q (reporting date: 2023-06-17), 10-Q (reporting date: 2023-03-25), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-03), 10-Q (reporting date: 2022-06-11), 10-Q (reporting date: 2022-03-19), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-04), 10-Q (reporting date: 2021-06-12), 10-Q (reporting date: 2021-03-20), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-05), 10-Q (reporting date: 2020-06-13), 10-Q (reporting date: 2020-03-21).
- Net Profit Margin
- The net profit margin shows a generally stable pattern with fluctuations across the periods analyzed. Starting from about 10.12% in early 2020, it increased to a peak of approximately 12.57% in mid-2022. However, after this peak, there was a decline to around 7.48% in early 2023. Subsequently, the margin experienced a recovery trend and stabilized near 10%, maintaining relative consistency toward early 2025.
- Asset Turnover
- Asset turnover exhibited a steady upward trend from about 0.76 in early 2020 to a peak of 0.95 in mid-2023. Following this peak, the ratio slightly declined but remained close to 0.9 through to early 2025. This suggests an improvement in the efficiency of asset utilization over the observed periods, with a minor reduction toward the end of the timeframe.
- Financial Leverage
- Financial leverage showed a decreasing trend initially, declining from 6.32 at the beginning of the observed period to a low near 4.98 in late 2022. Thereafter, leverage increased moderately, fluctuating between 5.12 and 5.53 in the most recent periods. This pattern indicates a reduction in reliance on debt financing initially, followed by a slight increase or stabilization in leverage levels.
- Return on Equity (ROE)
- ROE followed a pattern of considerable volatility throughout the periods. High values were recorded in the early phases, with peaks exceeding 53% in mid-2020 and late 2021. A sharp decline occurred in early 2023, dropping below 40%, before a gradual recovery to approximately 50% by early 2025. The observed fluctuations suggest variability in profitability and capital efficiency, influenced by changes in profit margin, asset turnover, and leverage.
Two-Component Disaggregation of ROA
PepsiCo Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-03-22), 10-K (reporting date: 2024-12-28), 10-Q (reporting date: 2024-09-07), 10-Q (reporting date: 2024-06-15), 10-Q (reporting date: 2024-03-23), 10-K (reporting date: 2023-12-30), 10-Q (reporting date: 2023-09-09), 10-Q (reporting date: 2023-06-17), 10-Q (reporting date: 2023-03-25), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-03), 10-Q (reporting date: 2022-06-11), 10-Q (reporting date: 2022-03-19), 10-K (reporting date: 2021-12-25), 10-Q (reporting date: 2021-09-04), 10-Q (reporting date: 2021-06-12), 10-Q (reporting date: 2021-03-20), 10-K (reporting date: 2020-12-26), 10-Q (reporting date: 2020-09-05), 10-Q (reporting date: 2020-06-13), 10-Q (reporting date: 2020-03-21).
- Net Profit Margin
-
Net profit margin exhibits a generally positive trend starting from the first available data point at 10.12% in March 2020, peaking at 12.57% in June 2022. Following this peak, it declines significantly to 7.48% in March 2023 before gradually recovering to a stable range between 9.92% and 10.43% in the quarters from December 2023 through March 2025. Overall, net profit margin shows resilience despite fluctuations, maintaining an approximate 10% level in the later periods.
- Asset Turnover
-
Asset turnover demonstrates a steady improvement over the observed periods. Beginning around 0.76 in March 2020, it consistently rises, reaching a high point of 0.95 in June 2023. After this peak, the ratio experiences a slight decrease but remains relatively stable around 0.9 towards the end of the dataset in March 2025. This pattern indicates increasing efficiency in asset utilization initially, with a minor stabilization in recent periods.
- Return on Assets (ROA)
-
Return on assets follows a similar upward trajectory as net profit margin and asset turnover in the early periods, increasing from 7.66% in March 2020 to a maximum of 10.93% in June 2022. Post this peak, ROA declines to 7.07% in March 2023, then displays a recovery trend reaching approximately 9.6% in the subsequent years until March 2025. The fluctuations in ROA appear correlated with those seen in net profit margin, reflecting changes in both profitability and asset efficiency over time.