Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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- Balance Sheet: Assets
- Common-Size Balance Sheet: Assets
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Analysis of Profitability Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Capital Asset Pricing Model (CAPM)
- Present Value of Free Cash Flow to Equity (FCFE)
- Price to Earnings (P/E) since 2020
- Price to Book Value (P/BV) since 2020
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Two-Component Disaggregation of ROE
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by return on assets ratio (ROA).
Three-Component Disaggregation of ROE
ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
---|---|---|---|---|---|---|---|
Dec 31, 2022 | = | × | × | ||||
Dec 31, 2021 | = | × | × | ||||
Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by net profit margin ratio.
Five-Component Disaggregation of ROE
ROE | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | × | Financial Leverage | |
---|---|---|---|---|---|---|---|---|---|---|---|
Dec 31, 2022 | = | × | × | × | × | ||||||
Dec 31, 2021 | = | × | × | × | × | ||||||
Dec 31, 2020 | = | × | × | × | × |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.
Two-Component Disaggregation of ROA
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
---|---|---|---|---|---|---|---|---|---|
Dec 31, 2022 | = | × | × | × | |||||
Dec 31, 2021 | = | × | × | × | |||||
Dec 31, 2020 | = | × | × | × |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
---|---|---|---|---|---|---|---|
Dec 31, 2022 | = | × | × | ||||
Dec 31, 2021 | = | × | × | ||||
Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The primary reason for the increase in net profit margin ratio over 2022 year is the increase in operating profitability measured by EBIT margin ratio.