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

Two-Component Disaggregation of ROE
Three-Component Disaggregation of ROE
Five-Component Disaggregation of ROE
Two-Component Disaggregation of ROA
Four-Component Disaggregation of ROA
Disaggregation of Net Profit Margin

Chevron Corp., decomposition of ROE (quarterly data)


	ROE	=	ROA	×	Financial Leverage
Jun 30, 2020	-6.49%	=	-3.89%	×	1.67
Mar 31, 2020	2.69%	=	1.64%	×	1.64
Dec 31, 2019	2.03%	=	1.23%	×	1.65
Sep 30, 2019	8.51%	=	5.17%	×	1.65
Jun 30, 2019	9.42%	=	5.76%	×	1.64
Mar 31, 2019	8.92%	=	5.39%	×	1.66
Dec 31, 2018	9.59%	=	5.84%	×	1.64
Sep 30, 2018	9.25%	=	5.54%	×	1.67
Jun 30, 2018	7.96%	=	4.70%	×	1.69
Mar 31, 2018	6.75%	=	3.96%	×	1.71
Dec 31, 2017	6.21%	=	3.62%	×	1.71
Sep 30, 2017	4.43%	=	2.55%	×	1.74
Jun 30, 2017	3.99%	=	2.29%	×	1.74
Mar 31, 2017	1.99%	=	1.12%	×	1.77
Dec 31, 2016	-0.34%	=	-0.19%	×	1.79
Sep 30, 2016	-1.02%	=	-0.58%	×	1.77
Jun 30, 2016	-0.51%	=	-0.29%	×	1.78
Mar 31, 2016	0.86%	=	0.49%	×	1.76
Dec 31, 2015	3.00%	=	1.72%	×	1.74
Sep 30, 2015	—	=	—	×	1.73
Jun 30, 2015	—	=	—	×	1.72
Mar 31, 2015	—	=	—	×	1.73

The primary reason for the decrease in return on equity ratio (ROE) over Q2 2020 is the decrease in profitability measured by return on assets ratio (ROA).

Chevron Corp., decomposition of ROE (quarterly data)


	ROE	=	Net Profit Margin	×	Asset Turnover	×	Financial Leverage
Jun 30, 2020	-6.49%	=	-7.57%	×	0.51	×	1.67
Mar 31, 2020	2.69%	=	2.86%	×	0.57	×	1.64
Dec 31, 2019	2.03%	=	2.09%	×	0.59	×	1.65
Sep 30, 2019	8.51%	=	9.11%	×	0.57	×	1.65
Jun 30, 2019	9.42%	=	9.63%	×	0.60	×	1.64
Mar 31, 2019	8.92%	=	8.81%	×	0.61	×	1.66
Dec 31, 2018	9.59%	=	9.33%	×	0.63	×	1.64
Sep 30, 2018	9.25%	=	9.17%	×	0.60	×	1.67
Jun 30, 2018	7.96%	=	8.25%	×	0.57	×	1.69
Mar 31, 2018	6.75%	=	7.30%	×	0.54	×	1.71
Dec 31, 2017	6.21%	=	6.83%	×	0.53	×	1.71
Sep 30, 2017	4.43%	=	5.06%	×	0.50	×	1.74
Jun 30, 2017	3.99%	=	4.71%	×	0.49	×	1.74
Mar 31, 2017	1.99%	=	2.45%	×	0.46	×	1.77
Dec 31, 2016	-0.34%	=	-0.45%	×	0.42	×	1.79
Sep 30, 2016	-1.02%	=	-1.39%	×	0.42	×	1.77
Jun 30, 2016	-0.51%	=	-0.67%	×	0.43	×	1.78
Mar 31, 2016	0.86%	=	1.07%	×	0.46	×	1.76
Dec 31, 2015	3.00%	=	3.53%	×	0.49	×	1.74
Sep 30, 2015	—	=	—	×	—	×	1.73
Jun 30, 2015	—	=	—	×	—	×	1.72
Mar 31, 2015	—	=	—	×	—	×	1.73

The primary reason for the decrease in return on equity ratio (ROE) over Q2 2020 is the decrease in profitability measured by net profit margin ratio.

Chevron Corp., decomposition of ROE (quarterly data)


	ROE	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover	×	Financial Leverage
Jun 30, 2020	-6.49%	=	—	×	—	×	-8.71%	×	0.51	×	1.67
Mar 31, 2020	2.69%	=	0.67	×	0.89	×	4.84%	×	0.57	×	1.64
Dec 31, 2019	2.03%	=	0.52	×	0.88	×	4.59%	×	0.59	×	1.65
Sep 30, 2019	8.51%	=	0.70	×	0.96	×	13.51%	×	0.57	×	1.65
Jun 30, 2019	9.42%	=	0.72	×	0.96	×	13.93%	×	0.60	×	1.64
Mar 31, 2019	8.92%	=	0.71	×	0.96	×	12.90%	×	0.61	×	1.66
Dec 31, 2018	9.59%	=	0.72	×	0.96	×	13.40%	×	0.63	×	1.64
Sep 30, 2018	9.25%	=	0.83	×	0.96	×	11.51%	×	0.60	×	1.67
Jun 30, 2018	7.96%	=	0.86	×	0.96	×	9.97%	×	0.57	×	1.69
Mar 31, 2018	6.75%	=	0.92	×	0.96	×	8.27%	×	0.54	×	1.71
Dec 31, 2017	6.21%	=	1.01	×	0.97	×	7.02%	×	0.53	×	1.71
Sep 30, 2017	4.43%	=	0.80	×	0.98	×	6.50%	×	0.50	×	1.74
Jun 30, 2017	3.99%	=	0.88	×	0.97	×	5.54%	×	0.49	×	1.74
Mar 31, 2017	1.99%	=	1.11	×	0.91	×	2.42%	×	0.46	×	1.77
Dec 31, 2016	-0.34%	=	—	×	—	×	-1.84%	×	0.42	×	1.79
Sep 30, 2016	-1.02%	=	—	×	—	×	-4.45%	×	0.42	×	1.77
Jun 30, 2016	-0.51%	=	—	×	—	×	-2.87%	×	0.43	×	1.78
Mar 31, 2016	0.86%	=	10.97	×	1.00	×	0.10%	×	0.46	×	1.76
Dec 31, 2015	3.00%	=	0.97	×	1.00	×	3.63%	×	0.49	×	1.74
Sep 30, 2015	—	=	—	×	—	×	—	×	—	×	1.73
Jun 30, 2015	—	=	—	×	—	×	—	×	—	×	1.72
Mar 31, 2015	—	=	—	×	—	×	—	×	—	×	1.73

The primary reason for the decrease in return on equity ratio (ROE) over Q2 2020 is the decrease in operating profitability measured by EBIT margin ratio.

Chevron Corp., decomposition of ROA (quarterly data)


	ROA	=	Net Profit Margin	×	Asset Turnover
Jun 30, 2020	-3.89%	=	-7.57%	×	0.51
Mar 31, 2020	1.64%	=	2.86%	×	0.57
Dec 31, 2019	1.23%	=	2.09%	×	0.59
Sep 30, 2019	5.17%	=	9.11%	×	0.57
Jun 30, 2019	5.76%	=	9.63%	×	0.60
Mar 31, 2019	5.39%	=	8.81%	×	0.61
Dec 31, 2018	5.84%	=	9.33%	×	0.63
Sep 30, 2018	5.54%	=	9.17%	×	0.60
Jun 30, 2018	4.70%	=	8.25%	×	0.57
Mar 31, 2018	3.96%	=	7.30%	×	0.54
Dec 31, 2017	3.62%	=	6.83%	×	0.53
Sep 30, 2017	2.55%	=	5.06%	×	0.50
Jun 30, 2017	2.29%	=	4.71%	×	0.49
Mar 31, 2017	1.12%	=	2.45%	×	0.46
Dec 31, 2016	-0.19%	=	-0.45%	×	0.42
Sep 30, 2016	-0.58%	=	-1.39%	×	0.42
Jun 30, 2016	-0.29%	=	-0.67%	×	0.43
Mar 31, 2016	0.49%	=	1.07%	×	0.46
Dec 31, 2015	1.72%	=	3.53%	×	0.49
Sep 30, 2015	—	=	—	×	—
Jun 30, 2015	—	=	—	×	—
Mar 31, 2015	—	=	—	×	—

The primary reason for the decrease in return on assets ratio (ROA) over Q2 2020 is the decrease in profitability measured by net profit margin ratio.

Chevron Corp., decomposition of ROA (quarterly data)


	ROA	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover
Jun 30, 2020	-3.89%	=	—	×	—	×	-8.71%	×	0.51
Mar 31, 2020	1.64%	=	0.67	×	0.89	×	4.84%	×	0.57
Dec 31, 2019	1.23%	=	0.52	×	0.88	×	4.59%	×	0.59
Sep 30, 2019	5.17%	=	0.70	×	0.96	×	13.51%	×	0.57
Jun 30, 2019	5.76%	=	0.72	×	0.96	×	13.93%	×	0.60
Mar 31, 2019	5.39%	=	0.71	×	0.96	×	12.90%	×	0.61
Dec 31, 2018	5.84%	=	0.72	×	0.96	×	13.40%	×	0.63
Sep 30, 2018	5.54%	=	0.83	×	0.96	×	11.51%	×	0.60
Jun 30, 2018	4.70%	=	0.86	×	0.96	×	9.97%	×	0.57
Mar 31, 2018	3.96%	=	0.92	×	0.96	×	8.27%	×	0.54
Dec 31, 2017	3.62%	=	1.01	×	0.97	×	7.02%	×	0.53
Sep 30, 2017	2.55%	=	0.80	×	0.98	×	6.50%	×	0.50
Jun 30, 2017	2.29%	=	0.88	×	0.97	×	5.54%	×	0.49
Mar 31, 2017	1.12%	=	1.11	×	0.91	×	2.42%	×	0.46
Dec 31, 2016	-0.19%	=	—	×	—	×	-1.84%	×	0.42
Sep 30, 2016	-0.58%	=	—	×	—	×	-4.45%	×	0.42
Jun 30, 2016	-0.29%	=	—	×	—	×	-2.87%	×	0.43
Mar 31, 2016	0.49%	=	10.97	×	1.00	×	0.10%	×	0.46
Dec 31, 2015	1.72%	=	0.97	×	1.00	×	3.63%	×	0.49
Sep 30, 2015	—	=	—	×	—	×	—	×	—
Jun 30, 2015	—	=	—	×	—	×	—	×	—
Mar 31, 2015	—	=	—	×	—	×	—	×	—

The primary reason for the decrease in return on assets ratio (ROA) over Q2 2020 is the decrease in operating profitability measured by EBIT margin ratio.

Chevron Corp., decomposition of net profit margin ratio (quarterly data)


	Net Profit Margin	=	Tax Burden	×	Interest Burden	×	EBIT Margin
Jun 30, 2020	-7.57%	=	—	×	—	×	-8.71%
Mar 31, 2020	2.86%	=	0.67	×	0.89	×	4.84%
Dec 31, 2019	2.09%	=	0.52	×	0.88	×	4.59%
Sep 30, 2019	9.11%	=	0.70	×	0.96	×	13.51%
Jun 30, 2019	9.63%	=	0.72	×	0.96	×	13.93%
Mar 31, 2019	8.81%	=	0.71	×	0.96	×	12.90%
Dec 31, 2018	9.33%	=	0.72	×	0.96	×	13.40%
Sep 30, 2018	9.17%	=	0.83	×	0.96	×	11.51%
Jun 30, 2018	8.25%	=	0.86	×	0.96	×	9.97%
Mar 31, 2018	7.30%	=	0.92	×	0.96	×	8.27%
Dec 31, 2017	6.83%	=	1.01	×	0.97	×	7.02%
Sep 30, 2017	5.06%	=	0.80	×	0.98	×	6.50%
Jun 30, 2017	4.71%	=	0.88	×	0.97	×	5.54%
Mar 31, 2017	2.45%	=	1.11	×	0.91	×	2.42%
Dec 31, 2016	-0.45%	=	—	×	—	×	-1.84%
Sep 30, 2016	-1.39%	=	—	×	—	×	-4.45%
Jun 30, 2016	-0.67%	=	—	×	—	×	-2.87%
Mar 31, 2016	1.07%	=	10.97	×	1.00	×	0.10%
Dec 31, 2015	3.53%	=	0.97	×	1.00	×	3.63%
Sep 30, 2015	—	=	—	×	—	×	—
Jun 30, 2015	—	=	—	×	—	×	—
Mar 31, 2015	—	=	—	×	—	×	—

The primary reason for the decrease in net profit margin ratio over Q2 2020 is the decrease in operating profitability measured by EBIT margin ratio.

Chevron Corp. (NYSE:CVX)

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

Two-Component Disaggregation of ROE

Three-Component Disaggregation of ROE

Five-Component Disaggregation of ROE

Two-Component Disaggregation of ROA

Four-Component Disaggregation of ROA

Disaggregation of Net Profit Margin

Chevron Corp. (NYSE:CVX)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit MarginQuarterly Data

Two-Component Disaggregation of ROE

Three-Component Disaggregation of ROE

Five-Component Disaggregation of ROE

Two-Component Disaggregation of ROA

Four-Component Disaggregation of ROA

Disaggregation of Net Profit Margin

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