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.
Two-Component Disaggregation of ROE
Chipotle Mexican Grill Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The analyzed financial data displays several key trends in profitability and capital structure over the observed periods.
- Return on Assets (ROA)
- The ROA begins to be recorded starting from March 31, 2021, and demonstrates a consistent upward trend throughout the periods. Initially at 5.95%, it increases steadily to peak at 17.26% by September 30, 2024. Although there is a slight decline following the peak, the ROA remains robust, maintaining a level above 16% towards the end of the last period. This progression indicates improving efficiency in asset utilization to generate earnings over time.
- Financial Leverage
- Financial leverage ratios are reported starting from the first period and show a gradual decrease over time. Beginning at 3.11, the ratio hovers around 3.0 in early periods but then steadily declines to a lower point of 2.4 by June 30, 2024. In the final periods, leverage slightly increases but remains below the initial values. This trend suggests a modest reduction in debt relative to equity, indicating a cautious approach to financing and potentially lower financial risk.
- Return on Equity (ROE)
- The ROE data, available from the early periods, portrays a significant upward trajectory. Starting from 17.61%, ROE rises markedly to above 40% between March 31, 2023, and the end of the dataset. The highest observed value is 44.73% on June 30, 2025. Minor fluctuations occur, but the overall pattern points to strong returns generated on shareholder investments, reflecting enhanced profitability and possibly effective management leveraging both equity and debt.
In summary, the financial indicators demonstrate improving profitability metrics (ROA and ROE) alongside a gradual reduction in financial leverage. This combination suggests an effective utilization of assets and equity to generate returns, coupled with a prudent capital structure strategy to manage financial risk. The trends reflect strengthening financial performance and sound financial management in the periods observed.
Three-Component Disaggregation of ROE
Chipotle Mexican Grill Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
- Net Profit Margin
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The net profit margin shows a consistent upward trend starting from 5.94% in March 2021, steadily increasing to a peak of 13.59% in June 2025. There are minor fluctuations, but the overall trajectory indicates improved profitability over the analyzed periods. This suggests enhanced operational efficiency or favorable cost management leading to higher retained earnings as a proportion of revenue.
- Asset Turnover
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Asset turnover displays relative stability with a gradual increase from approximately 1.00 in March 2021 to a peak of 1.27 in September 2024, followed by a slight decline towards the end of the period, settling around 1.25. This pattern indicates that the company has improved its efficiency in utilizing assets to generate sales over time, although the recent minor decrease may warrant monitoring.
- Financial Leverage
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Financial leverage ratio has generally decreased over time, starting from 3.11 in March 2020 and declining to a low of 2.40 by June 2024. However, there is a modest upward movement in the last few quarters, ending near 2.63 in June 2025. The initial decline suggests reduced reliance on debt or other financial obligations, enhancing the company’s financial stability. The recent slight rise may reflect new financing or changes in capital structure.
- Return on Equity (ROE)
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ROE demonstrates a strong upward trend with some cyclical fluctuations, rising from 17.61% in March 2021 to a maximum of 44.73% in March 2025. The upward momentum highlights increasing profitability relative to shareholders’ equity, driven by improvements in net profit margin and asset turnover, along with controlled financial leverage. This indicates effective management in generating returns for equity holders.
Two-Component Disaggregation of ROA
Chipotle Mexican Grill Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-06-30), 10-Q (reporting date: 2025-03-31), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-30), 10-Q (reporting date: 2024-06-30), 10-Q (reporting date: 2024-03-31), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).
The financial data indicates a generally positive trend across key performance metrics over the examined periods.
- Net Profit Margin
- The net profit margin shows a steady increase starting from 5.94% in March 2021, progressing consistently to reach a high of approximately 13.59% in December 2024. There is a slight decrease toward March 2025 at 13.32%, but overall the trend indicates increasing profitability and improved operational efficiency over the years.
- Asset Turnover
- This ratio demonstrates gradual growth from 1.00 in March 2021 to a peak of 1.27 by March 2024, signaling enhanced efficiency in using assets to generate revenue. Thereafter, the ratio fluctuates slightly but remains stable around 1.23-1.25 through June 2025, reflecting sustained effectiveness in asset utilization.
- Return on Assets (ROA)
- ROA exhibits a marked upward trajectory, beginning at 5.95% in March 2021 and advancing consistently to reach a peak of 17.26% in September 2024. Although a minor decline is noted afterward, with 16.64% by June 2025, the overall pattern points to strong improvement in profitability relative to asset base over the period.
In summary, the company has demonstrated significant enhancements in profitability and operational efficiency from early 2021 through mid-2025, as reflected by steady gains in net profit margin, asset turnover, and return on assets. These trends suggest effective management and a strengthening financial position over time.