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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- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Enterprise Value (EV)
- Dividend Discount Model (DDM)
- Operating Profit Margin since 2012
- Current Ratio since 2012
- Debt to Equity since 2012
- Analysis of Revenues
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Two-Component Disaggregation of ROE
AbbVie Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Return on Assets (ROA)
- The Return on Assets exhibited an upward trajectory beginning from March 31, 2021, increasing from 3.07% to a peak of 9.49% by December 31, 2022. Following this peak, there was a noticeable decline, with ROA decreasing to 4.78% at September 30, 2023. The trend further continued downward reaching 2.74% as of June 30, 2025. This pattern indicates a period of improving asset efficiency that was followed by a sustained decline in subsequent quarters.
- Financial Leverage
- Financial leverage showed fluctuations throughout the periods under review. Initially, it was relatively stable, around the range of 9.8 to 11.77 from June 30, 2020, through June 30, 2021. However, starting from December 31, 2021, there was a general increasing trend, accelerating significantly after March 31, 2024. The leverage ratio escalated sharply from 13.00 to an extreme high of 95.89 by March 31, 2025. This suggests a substantial increase in the company's reliance on debt financing over time, especially pronounced in the latest quarters.
- Return on Equity (ROE)
- Return on Equity demonstrated a strong positive trend from March 31, 2021, to September 30, 2022, increasing from 35.3% to 86.24%. After this peak, ROE showed variability but generally remained high, with some periods of decline, notably dropping to 46.94% on December 31, 2023. From March 31, 2024, a sharp upward trend occurred, reaching an exceptionally high level of 295.42% by June 30, 2025. This indicates that equity holders experienced significantly enhanced returns in the final periods, which likely correlates with the marked increase in financial leverage.
Three-Component Disaggregation of ROE
AbbVie Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Net Profit Margin
- The net profit margin displays a generally strong upward trend starting from 10.08% in the first available quarter (March 31, 2020). It peaks around the December 31, 2022 period at 23.19%. Following this peak, there is a notable decline in margin, dropping to 6.45% by June 30, 2025. This indicates that profit efficiency improved significantly through 2022 but weakened substantially afterward.
- Asset Turnover
- Asset turnover shows a gradual increase from 0.3 at March 31, 2020, moving steadily upward with minor fluctuations. By the latest period available, June 30, 2025, it reaches 0.43, the highest value recorded. This suggests improving effectiveness in using assets to generate sales over time, although the increments are moderate and relatively stable compared to other metrics.
- Financial Leverage
- Financial leverage exhibits substantial variability across periods. Starting from 10.17 in June 30, 2020, it fluctuates moderately within the 8 to 13 range until December 31, 2023. After this, it escalates dramatically, reaching 95.89 by June 30, 2025. This sharp increase indicates a rising reliance on debt or other liabilities to finance assets, which may signify heightened financial risk or strategic leveraging decisions during the last reporting periods.
- Return on Equity (ROE)
- Return on equity moves in a pattern that corresponds closely with net profit margin and financial leverage trends. From 35.3% in March 31, 2020, it progresses upward quite strongly, peaking at 86.24% on September 30, 2022. Subsequently, it experiences some oscillation but remains elevated until a very pronounced surge after March 31, 2024, reaching an exceptionally high figure of 295.42% by June 30, 2025. This indicates exceptional shareholder returns mostly driven by increasing leverage and maintained profit margins, although such extreme values may warrant further scrutiny for sustainability and potential risk factors.
Two-Component Disaggregation of ROA
AbbVie Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Net Profit Margin
- The net profit margin shows a clear upward trend starting from 10.08% in March 2021, peaking at 23.19% in December 2022. Following this peak, a declining pattern emerges, with the margin dropping to 6.45% by June 2025. This indicates an initial improvement in profitability and operational efficiency until late 2022, after which profitability faced considerable downward pressure.
- Asset Turnover
- The asset turnover ratio demonstrates a general upward trend from 0.30 in March 2021 to 0.43 by June 2025. The increase indicates improving efficiency in utilizing assets to generate revenue over the period. Minor fluctuations occur, but the overall pattern is one of steady growth in asset turnover.
- Return on Assets (ROA)
- Return on assets consistently improved from 3.07% in March 2021, reaching a peak of 9.49% in December 2022, reflecting enhanced profitability relative to company assets. After the peak, a notable decline occurs, with ROA falling to 2.74% by June 2025. This mirrors the net profit margin trend, indicating that reduced profitability impacted the returns generated on assets during the latter period.