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.
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- Statement of Comprehensive Income
- Analysis of Liquidity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Price to FCFE (P/FCFE)
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Price to Sales (P/S) since 2005
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Two-Component Disaggregation of ROE
PepsiCo Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-06), 10-Q (reporting date: 2025-06-14), 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 exhibits a fluctuating pattern over the periods analyzed. Starting from a value of 7.66% in early 2020, it generally trends upward, peaking at 10.93% by mid-2022. Following this peak, there is a gradual decline towards the end of the observed timeline, with ROA values dropping to 6.78% by the latter part of 2025. The variations suggest periods of improved asset efficiency followed by a reduction in profitability relative to assets.
- Financial Leverage
- Financial Leverage shows a decreasing trend from a high of 7.17 in mid-2020 down to a low near 4.98 in late 2022. Post this decline, leverage ratios stabilize between approximately 5.1 and 5.7 through to the end of 2025, indicating a move to a more moderate and steady use of debt or borrowed capital relative to equity over time. This reduction from initial high leverage points may imply efforts to strengthen the balance sheet or reduce financial risk.
- Return on Equity (ROE)
- The Return on Equity demonstrates high variability throughout the periods. ROE starts above 50% in early 2020, reaches peaks near 55.85% by mid-2022, and then experiences a downward shift to around 37.26% by late 2025. The trends in ROE reflect the combined influence of net income changes and leverage effects, where earlier high leverage levels coincided with elevated ROE figures. As financial leverage lessened, ROE correspondingly declined, indicating that equity returns were partly driven by increased leverage rather than organic profitability improvements.
Three-Component Disaggregation of ROE
PepsiCo Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-06), 10-Q (reporting date: 2025-06-14), 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 exhibits a fluctuating trend across the observed periods. Starting from around 10.12% in the early data points, the margin improved slightly, reaching a peak of approximately 12.57% during mid-2022. However, following this peak, there is a noticeable decline to roughly 7.48% by early 2023. Subsequent quarters reflect a gradual recovery to levels near 10%, before declining again toward the later data points where it settles near 7.8%. This pattern suggests variability in profitability, potentially influenced by external market conditions or internal cost management challenges.
- Asset Turnover
- Asset turnover ratios showed a steady upward trend from approximately 0.76 initially to a peak of 0.95 by mid-2023. Following this peak, the ratio slightly declined but maintained relatively high levels in the 0.9 range through the most recent periods. This indicates an improvement in the efficiency of asset usage over time, enabling the company to generate more revenue per unit of asset. The slight decrease toward the end may imply either asset base growth outpacing sales growth or a strategic shift in asset management.
- Financial Leverage
- Financial leverage declined noticeably from early values exceeding 7.0 down to a range between 4.9 and 5.5 in recent periods. This represents a substantial reduction in reliance on debt or financial obligations relative to equity. The decrease is gradual yet consistent until around early 2023, where leverage stabilizes in the mid-5 ratio area with minor fluctuations. This trend suggests improved balance sheet conservatism and a potential reduction in financial risk.
- Return on Equity (ROE)
- ROE figures follow a variable pattern with relatively high returns initially, peaking close to 55.85% around mid-2022. A pronounced dip follows, reaching approximately 38.62% by early 2023, then partially recovering to near 49% over the succeeding quarters before dropping again toward the latest observations below 40%. The fluctuations correspond closely with changes in net profit margin and financial leverage, indicating that profit variability alongside adjustments in capital structure significantly influenced shareholder returns. The decline in leverage likely tempered ROE despite improving asset turnover.
Two-Component Disaggregation of ROA
PepsiCo Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-06), 10-Q (reporting date: 2025-06-14), 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 exhibited some fluctuations across the observed periods. Initially, the margin increased from around 10.12% to a peak of approximately 12.57% in mid-2022. This was followed by a decline, dropping to a low near 7.48% by early 2023. A recovery phase ensued, with margins returning to roughly 10.34% by mid-2024, before experiencing a gradual decrease toward the latter periods, ending near 7.82% by late 2025. Overall, the margin shows cyclical behavior with periods of growth and contraction.
- Asset Turnover
- The asset turnover ratio demonstrated a steady upward trend in the initial timeframe, moving from about 0.76 to a peak near 0.95 by mid-2023. This suggests improved efficiency in using assets to generate revenue during this period. After reaching the peak, the ratio slightly declined and stabilized around 0.87 to 0.92 in the later periods, indicating a modest reduction but maintaining relatively strong asset utilization.
- Return on Assets (ROA)
- The return on assets mirrored some characteristics of the profit margin and asset turnover trends. It rose from approximately 7.66% to near 10.93% at mid-2022, reflecting better overall profitability and asset use. This improvement was followed by a decrease to about 7.07% by early 2023, consistent with the margin decline. Subsequent recovery brought ROA back to just above 9.5% during mid-2024, although it tapered off again toward the final periods, finishing below 7% by late 2025. These fluctuations suggest varying effectiveness in asset-generated earnings over time.