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DuPont Analysis: Decomposition of ROE
Difficulty: Beginner
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Starbucks Corp., decomposition of ROE
Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in Financial Leverage.
Three-Component Disaggregation of ROE
Starbucks Corp., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Leverage | |
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| Sep 30, 2018 | |
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| Oct 1, 2017 | |
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| Oct 2, 2016 | |
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| Sep 27, 2015 | |
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| Sep 28, 2014 | |
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| Sep 29, 2013 | |
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Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in Financial Leverage.
Five-Component Disaggregation of ROE
Starbucks Corp., decomposition of ROE
| ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Leverage | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2018 | |
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| Oct 1, 2017 | |
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| Oct 2, 2016 | |
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| Sep 27, 2015 | |
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| Sep 28, 2014 | |
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| Sep 29, 2013 | |
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Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the increase in Return on Equity (ROE) over 2018 year is the increase in Financial Leverage.
Two-Way Decomposition of ROA
Starbucks Corp., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Sep 30, 2018 | |
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| Oct 1, 2017 | |
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| Oct 2, 2016 | |
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| Sep 27, 2015 | |
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| Sep 28, 2014 | |
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| Sep 29, 2013 | |
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Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the decrease in Return on Assets (ROA) over 2018 year is the decrease in Asset Turnover.
Four-Way Decomposition of ROA
Starbucks Corp., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Sep 30, 2018 | |
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| Oct 1, 2017 | |
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| Oct 2, 2016 | |
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| Sep 27, 2015 | |
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| Sep 28, 2014 | |
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| Sep 29, 2013 | |
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Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the decrease in Return on Assets (ROA) over 2018 year is the decrease in efficiency measured by Asset Turnover.
Decomposition of Net Profit Margin
Starbucks Corp., decomposition of Net Profit Margin
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Sep 30, 2018 | |
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| Oct 1, 2017 | |
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| Oct 2, 2016 | |
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| Sep 27, 2015 | |
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| Sep 28, 2014 | |
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| Sep 29, 2013 | |
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Based on: 10-K (filing date: 2018-11-16), 10-K (filing date: 2017-11-17), 10-K (filing date: 2016-11-18), 10-K (filing date: 2015-11-12), 10-K (filing date: 2014-11-14), 10-K (filing date: 2013-11-18).
The primary reason for the increase in Net Profit Margin over 2018 year is the increase in operating profitability measured by EBIT Margin.
