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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Two-Component Disaggregation of ROE
AutoZone Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
- Return on Assets (ROA)
- The Return on Assets (ROA) metric shows a generally stable performance with some fluctuations across the periods analyzed. Initially, ROA decreased slightly from 14.78% in late 2018 to 12.01% by mid-2020, indicating a reduction in asset profitability during this period. Following this low point, a marked recovery is observed, with ROA increasing to a peak of 17.11% in early 2022. After this peak, ROA exhibits a gradual decline but remains above 15%, ending at approximately 15.85% towards the end of 2023. Overall, this pattern suggests a period of contraction or less efficient asset utilization around 2020, followed by a period of improvement and stabilization at a relatively strong profitability level.
- Financial Leverage
- There are no data points provided for Financial Leverage throughout the periods analyzed, precluding any assessment or trend analysis for this metric.
- Return on Equity (ROE)
- Return on Equity (ROE) data are entirely missing for the periods reviewed. Consequently, no insights or conclusions can be drawn regarding changes in shareholder return or equity profitability over time.
Three-Component Disaggregation of ROE
AutoZone Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
The analysis of the quarterly financial data reveals several notable trends across the reported periods.
- Net Profit Margin
- The net profit margin demonstrates a generally positive trend over the timeframe. Starting at 12.49% in November 2018, it experienced consistent growth, peaking around 15.44% in February 2022. Despite minor fluctuations, the margin remained relatively stable between 14% and 15% from late 2020 onward, ending at 14.62% in November 2023. This indicates improved profitability and effective cost management over the years.
- Asset Turnover
- Asset turnover ratios exhibit some variability throughout the periods. Initially, the ratio hovered around 1.18 in late 2018 but declined sharply to approximately 0.88-0.95 during 2019 and early 2020, suggesting a reduction in asset efficiency during that period. From mid-2020, the asset turnover ratio showed a recovery trend, gradually increasing to about 1.09 by November 2023. The recovery implies a renewed effectiveness in utilizing assets to generate sales.
- Financial Leverage
- No data is available for financial leverage, thus no analysis can be offered regarding the company's use of debt or equity financing strategies during these periods.
- Return on Equity (ROE)
- Similarly, no return on equity figures are provided, precluding any assessment of the company's overall profitability relative to shareholder equity.
Overall, the profitability margin improvement combined with the recovery in asset turnover suggests operational efficiencies gained in recent years. The lack of data on financial leverage and ROE limits a full assessment of financial structure and shareholder return trends.
Two-Component Disaggregation of ROA
AutoZone Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2023-11-18), 10-K (reporting date: 2023-08-26), 10-Q (reporting date: 2023-05-06), 10-Q (reporting date: 2023-02-11), 10-Q (reporting date: 2022-11-19), 10-K (reporting date: 2022-08-27), 10-Q (reporting date: 2022-05-07), 10-Q (reporting date: 2022-02-12), 10-Q (reporting date: 2021-11-20), 10-K (reporting date: 2021-08-28), 10-Q (reporting date: 2021-05-08), 10-Q (reporting date: 2021-02-13), 10-Q (reporting date: 2020-11-21), 10-K (reporting date: 2020-08-29), 10-Q (reporting date: 2020-05-09), 10-Q (reporting date: 2020-02-15), 10-Q (reporting date: 2019-11-23), 10-K (reporting date: 2019-08-31), 10-Q (reporting date: 2019-05-04), 10-Q (reporting date: 2019-02-09), 10-Q (reporting date: 2018-11-17).
The financial data reveals several notable trends over the analyzed quarters. The net profit margin exhibits a gradual increase from approximately 12.49% in late 2018 to a peak of around 15.44% by early 2022, followed by a slight decline and stabilization around 14.6% towards late 2023. This pattern indicates an overall improvement in profitability with some recent stabilization.
Asset turnover starts at about 1.18 and demonstrates a decline through 2019 and 2020, reaching a low near 0.88. However, it gradually recovers from late 2020 onward, stabilizing slightly above 1.0 by mid-2021 and remaining around 1.08 to 1.11 in the most recent periods. This suggests initial difficulties in efficiently using assets to generate sales, followed by steady improvement.
Return on assets (ROA) follows a similar trend to net profit margin, beginning around 14.78% in late 2018, dipping during 2019 and early 2020 to roughly 12%, and then rising to peak at 17.11% in early 2022. After this peak, ROA slightly decreases but maintains a strong level above 15.5%. This indicates enhanced overall asset profitability, reflecting both improved net profit margins and asset utilization efficiency.
- Net Profit Margin
- Trended upward from 12.5% to 15.4% over three years, showing enhanced profitability; recent quarters show minor fluctuations and slight decline, stabilizing just below 15%.
- Asset Turnover
- Experienced a reduction from above 1.1 to below 0.9 during 2019–2020, indicating decreased sales efficiency relative to assets; subsequently recovered to levels around 1.1, suggesting improved asset utilization.
- Return on Assets (ROA)
- Initially decreased in tandem with asset turnover and net profit margin declines; then increased significantly, peaking above 17%, with a moderate decline afterward but overall sustained strong returns on assets.
In summary, the data depicts a phase of operational challenges impacting asset efficiency and profitability through 2019 and early 2020, followed by a recovery phase characterized by enhanced margins and asset utilization. Although recent quarters show some moderation, profitability and asset returns remain robust relative to the starting point.