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Microsoft Excel LibreOffice Calc

Twenty-First Century Fox Inc. (FOX)

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

Beginner level

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

Two-Component Disaggregation of ROE

Twenty-First Century Fox Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Jun 30, 2018 22.82% = 8.29% × 2.75
Jun 30, 2017 18.78% = 5.82% × 3.23
Jun 30, 2016 20.17% = 5.70% × 3.54
Jun 30, 2015 48.23% = 16.60% × 2.91
Jun 30, 2014 25.92% = 8.24% × 3.15
Jun 30, 2013 41.75% = 13.93% × 3.00

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in return on equity ratio (ROE) over 2018 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Twenty-First Century Fox Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jun 30, 2018 22.82% = 14.68% × 0.56 × 2.75
Jun 30, 2017 18.78% = 10.36% × 0.56 × 3.23
Jun 30, 2016 20.17% = 10.08% × 0.56 × 3.54
Jun 30, 2015 48.23% = 28.65% × 0.58 × 2.91
Jun 30, 2014 25.92% = 14.17% × 0.58 × 3.15
Jun 30, 2013 41.75% = 25.64% × 0.54 × 3.00

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in return on equity ratio (ROE) over 2018 year is the increase in profitability measured by net profit margin ratio.

Five-Component Disaggregation of ROE

Twenty-First Century Fox Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jun 30, 2018 22.82% = 1.09 × 0.77 × 17.59% × 0.56 × 2.75
Jun 30, 2017 18.78% = 0.68 × 0.78 × 19.61% × 0.56 × 3.23
Jun 30, 2016 20.17% = 0.71 × 0.77 × 18.55% × 0.56 × 3.54
Jun 30, 2015 48.23% = 0.87 × 0.89 × 37.08% × 0.58 × 2.91
Jun 30, 2014 25.92% = 0.78 × 0.84 × 21.67% × 0.58 × 3.15
Jun 30, 2013 41.75% = 0.81 × 0.89 × 35.59% × 0.54 × 3.00

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in return on equity ratio (ROE) over 2018 year is the increase in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

Twenty-First Century Fox Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Jun 30, 2018 8.29% = 14.68% × 0.56
Jun 30, 2017 5.82% = 10.36% × 0.56
Jun 30, 2016 5.70% = 10.08% × 0.56
Jun 30, 2015 16.60% = 28.65% × 0.58
Jun 30, 2014 8.24% = 14.17% × 0.58
Jun 30, 2013 13.93% = 25.64% × 0.54

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in return on assets ratio (ROA) over 2018 year is the increase in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

Twenty-First Century Fox Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jun 30, 2018 8.29% = 1.09 × 0.77 × 17.59% × 0.56
Jun 30, 2017 5.82% = 0.68 × 0.78 × 19.61% × 0.56
Jun 30, 2016 5.70% = 0.71 × 0.77 × 18.55% × 0.56
Jun 30, 2015 16.60% = 0.87 × 0.89 × 37.08% × 0.58
Jun 30, 2014 8.24% = 0.78 × 0.84 × 21.67% × 0.58
Jun 30, 2013 13.93% = 0.81 × 0.89 × 35.59% × 0.54

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in return on assets ratio (ROA) over 2018 year is the increase in effect of taxes measured by tax burden ratio.

Disaggregation of Net Profit Margin

Twenty-First Century Fox Inc., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jun 30, 2018 14.68% = 1.09 × 0.77 × 17.59%
Jun 30, 2017 10.36% = 0.68 × 0.78 × 19.61%
Jun 30, 2016 10.08% = 0.71 × 0.77 × 18.55%
Jun 30, 2015 28.65% = 0.87 × 0.89 × 37.08%
Jun 30, 2014 14.17% = 0.78 × 0.84 × 21.67%
Jun 30, 2013 25.64% = 0.81 × 0.89 × 35.59%

Based on: 10-K (filing date: 2018-08-13), 10-K (filing date: 2017-08-14), 10-K (filing date: 2016-08-11), 10-K (filing date: 2015-08-13), 10-K (filing date: 2014-08-14), 10-K (filing date: 2013-08-19).

The primary reason for the increase in net profit margin ratio over 2018 year is the increase in effect of taxes measured by tax burden ratio.