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Boeing Co. (BA)

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

Boeing Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Leverage
Dec 31, 2017 2,309.01% 8.88% 260.09
Dec 31, 2016 599.14% 5.44% 110.16
Dec 31, 2015 81.70% 5.48% 14.90
Dec 31, 2014 62.85% 5.49% 11.45
Dec 31, 2013 30.82% 4.95% 6.23

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in Financial Leverage.

Three-Component Disaggregation of ROE

Boeing Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Leverage
Dec 31, 2017 2,309.01% 8.78% 1.01 260.09
Dec 31, 2016 599.14% 5.18% 1.05 110.16
Dec 31, 2015 81.70% 5.39% 1.02 14.90
Dec 31, 2014 62.85% 6.00% 0.91 11.45
Dec 31, 2013 30.82% 5.29% 0.93 6.23

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in Financial Leverage.

Five-Component Disaggregation of ROE

Boeing Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Dec 31, 2017 2,309.01% 0.82 0.97 11.14% 1.01 260.09
Dec 31, 2016 599.14% 0.88 0.95 6.21% 1.05 110.16
Dec 31, 2015 81.70% 0.72 0.96 7.73% 1.02 14.90
Dec 31, 2014 62.85% 0.76 0.96 8.23% 0.91 11.45
Dec 31, 2013 30.82% 0.74 0.94 7.64% 0.93 6.23

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in Financial Leverage.

Two-Way Decomposition of ROA

Boeing Co., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2017 8.88% 8.78% 1.01
Dec 31, 2016 5.44% 5.18% 1.05
Dec 31, 2015 5.48% 5.39% 1.02
Dec 31, 2014 5.49% 6.00% 0.91
Dec 31, 2013 4.95% 5.29% 0.93

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in profitability measured by Net Profit Margin.

Four-Way Decomposition of ROA

Boeing Co., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2017 8.88% 0.82 0.97 11.14% 1.01
Dec 31, 2016 5.44% 0.88 0.95 6.21% 1.05
Dec 31, 2015 5.48% 0.72 0.96 7.73% 1.02
Dec 31, 2014 5.49% 0.76 0.96 8.23% 0.91
Dec 31, 2013 4.95% 0.74 0.94 7.64% 0.93

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in operating profitability measured by EBIT Margin.

Decomposition of Net Profit Margin

Boeing Co., decomposition of Net Profit Margin

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2017 8.78% 0.82 0.97 11.14%
Dec 31, 2016 5.18% 0.88 0.95 6.21%
Dec 31, 2015 5.39% 0.72 0.96 7.73%
Dec 31, 2014 6.00% 0.76 0.96 8.23%
Dec 31, 2013 5.29% 0.74 0.94 7.64%

Based on: 10-K (filing date: 2018-02-12), 10-K (filing date: 2017-02-08), 10-K (filing date: 2016-02-10), 10-K (filing date: 2015-02-12), 10-K (filing date: 2014-02-14).

The primary reason for the increase in Net Profit Margin over 2017 year is the increase in operating profitability measured by EBIT Margin.