DuPont Analysis: Decomposition of ROE
Quarterly Data

Difficulty: Beginner


Two-Component Disaggregation of ROE

Chevron Corp., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = ROA × Leverage
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 5.58% 3.22% 1.73
Jun 30, 2015 7.89% 4.58% 1.72
Mar 31, 2015 11.10% 6.42% 1.73
Dec 31, 2014 12.41% 7.23% 1.72
Sep 30, 2014 13.26% 7.80% 1.70
Jun 30, 2014 13.06% 7.65% 1.71
Mar 31, 2014 13.11% 7.65% 1.71
Dec 31, 2013 14.37% 8.44% 1.70
Sep 30, 2013 % % 1.71
Jun 30, 2013 % % 1.71
Mar 31, 2013 % % 1.69

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Return on Equity (ROE) over Q1 2018 is the increase in profitability measured by Return on Assets (ROA).


Three-Component Disaggregation of ROE

Chevron Corp., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Leverage
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 5.58% 6.00% 0.54 1.73
Jun 30, 2015 7.89% 7.48% 0.61 1.72
Mar 31, 2015 11.10% 9.51% 0.67 1.73
Dec 31, 2014 12.41% 9.60% 0.75 1.72
Sep 30, 2014 13.26% 9.75% 0.80 1.70
Jun 30, 2014 13.06% 9.24% 0.83 1.71
Mar 31, 2014 13.11% 9.11% 0.84 1.71
Dec 31, 2013 14.37% 9.73% 0.87 1.70
Sep 30, 2013 % % 1.71
Jun 30, 2013 % % 1.71
Mar 31, 2013 % % 1.69

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Return on Equity (ROE) over Q1 2018 is the increase in profitability measured by Net Profit Margin.


Five-Component Disaggregation of ROE

Chevron Corp., decomposition of ROE (quarterly data)

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
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 5.58% 0.70 1.00 8.57% 0.54 1.73
Jun 30, 2015 7.89% 0.66 1.00 11.29% 0.61 1.72
Mar 31, 2015 11.10% 0.66 1.00 14.35% 0.67 1.73
Dec 31, 2014 12.41% 0.62 1.00 15.53% 0.75 1.72
Sep 30, 2014 13.26% 0.61 1.00 15.97% 0.80 1.70
Jun 30, 2014 13.06% 0.59 1.00 15.60% 0.83 1.71
Mar 31, 2014 13.11% 0.59 1.00 15.42% 0.84 1.71
Dec 31, 2013 14.37% 0.60 1.00 16.23% 0.87 1.70
Sep 30, 2013 % % 1.71
Jun 30, 2013 % % 1.71
Mar 31, 2013 % % 1.69

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Return on Equity (ROE) over Q1 2018 is the increase in operating profitability measured by EBIT Margin.


Two-Way Decomposition of ROA

Chevron Corp., decomposition of ROA (quarterly data)

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
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 3.22% 6.00% 0.54
Jun 30, 2015 4.58% 7.48% 0.61
Mar 31, 2015 6.42% 9.51% 0.67
Dec 31, 2014 7.23% 9.60% 0.75
Sep 30, 2014 7.80% 9.75% 0.80
Jun 30, 2014 7.65% 9.24% 0.83
Mar 31, 2014 7.65% 9.11% 0.84
Dec 31, 2013 8.44% 9.73% 0.87
Sep 30, 2013 % %
Jun 30, 2013 % %
Mar 31, 2013 % %

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Return on Assets (ROA) over Q1 2018 is the increase in profitability measured by Net Profit Margin.


Four-Way Decomposition of ROA

Chevron Corp., decomposition of ROA (quarterly data)

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
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 3.22% 0.70 1.00 8.57% 0.54
Jun 30, 2015 4.58% 0.66 1.00 11.29% 0.61
Mar 31, 2015 6.42% 0.66 1.00 14.35% 0.67
Dec 31, 2014 7.23% 0.62 1.00 15.53% 0.75
Sep 30, 2014 7.80% 0.61 1.00 15.97% 0.80
Jun 30, 2014 7.65% 0.59 1.00 15.60% 0.83
Mar 31, 2014 7.65% 0.59 1.00 15.42% 0.84
Dec 31, 2013 8.44% 0.60 1.00 16.23% 0.87
Sep 30, 2013 % %
Jun 30, 2013 % %
Mar 31, 2013 % %

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Return on Assets (ROA) over Q1 2018 is the increase in operating profitability measured by EBIT Margin.


Decomposition of Net Profit Margin

Chevron Corp., decomposition of Net Profit Margin (quarterly data)

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
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 6.00% 0.70 1.00 8.57%
Jun 30, 2015 7.48% 0.66 1.00 11.29%
Mar 31, 2015 9.51% 0.66 1.00 14.35%
Dec 31, 2014 9.60% 0.62 1.00 15.53%
Sep 30, 2014 9.75% 0.61 1.00 15.97%
Jun 30, 2014 9.24% 0.59 1.00 15.60%
Mar 31, 2014 9.11% 0.59 1.00 15.42%
Dec 31, 2013 9.73% 0.60 1.00 16.23%
Sep 30, 2013 % %
Jun 30, 2013 % %
Mar 31, 2013 % %

Source: Based on data from Chevron Corp. Quarterly and Annual Reports

 

The primary reason for the increase in Net Profit Margin over Q1 2018 is the increase in operating profitability measured by EBIT Margin.