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.
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- Net Profit Margin since 2005
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Two-Component Disaggregation of ROE
Coca-Cola Co., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Return on Assets (ROA)
- The ROA demonstrated a general upward trend from April 2021 to September 2023, increasing from 8.02% to a peak of 11.04%. This growth indicates improved efficiency in asset utilization over this period. From the peak, ROA slightly fluctuated but mainly remained above 10% through to mid-2025, reaching 12.29% by September 2025. These fluctuations suggest periods of varying asset productivity but an overall strengthening in generating returns from the company's assets.
- Financial Leverage
- Financial leverage saw a notable decline from 4.42 in April 2021 to 3.39 by September 2025. Between early 2021 and early 2023, leverage fluctuated but trended downward from approximately 4.4 to around 3.7–3.9. From mid-2023 onward, the reduction trend accelerated, pointing to a strategy of decreasing reliance on debt or liabilities relative to equity. This decreasing leverage suggests a more conservative capital structure and potentially lower financial risk.
- Return on Equity (ROE)
- ROE exhibited steady growth initially, rising from 35.46% in April 2021 to a peak near 43.52% in September 2022, reflecting strong profitability relative to shareholders’ equity. However, after this peak, ROE experienced minor fluctuations, generally oscillating between about 39% and 43% with no clear directional trend. Through the latest period in September 2025, ROE remained robust at approximately 41.7%. This consistency highlights sustained profitability and effective shareholder value creation despite changes in leverage and asset returns.
- Integrated Analysis
- The combination of rising ROA and decreasing financial leverage over the period suggests that improved asset efficiency contributed strongly to profitability, somewhat independent of financial leverage effects. The stable yet elevated ROE confirms that shareholders continued to receive solid returns, supported by both operational performance and a gradually more balanced capital structure. The trends indicate an overall financial profile with improving asset use, reduced financial risk, and sustained equity profitability.
Three-Component Disaggregation of ROE
Coca-Cola Co., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Net Profit Margin
- The net profit margin exhibits a generally stable but slightly fluctuating pattern over the periods analyzed. Starting at 21.59% in early 2021, it peaks at 25.69% in the first quarter of 2022, followed by a mild decline and stabilization around the low to mid-23% range for most of 2022 and into 2023. Towards the end of the period, from early 2024 through mid-2025, there is a renewed upward trend culminating at 27.34% by the third quarter of 2025, indicating improvements in profitability efficiency over time.
- Asset Turnover
- Asset turnover demonstrates a gradual improvement from 0.37 in early 2021 to a peak of 0.47 in early 2024. The ratio remains relatively consistent around 0.45 to 0.47 through much of the timeline, suggesting steady and slightly enhanced efficiency in utilizing assets to generate revenues. Minor fluctuations appear sporadically but without significant deviation from this upward trend.
- Financial Leverage
- Financial leverage shows a decreasing trend overall, starting from a relatively high ratio of 4.42 in early 2021 and gradually declining to 3.39 by the third quarter of 2025. This downward movement reflects a modest reduction in reliance on debt relative to equity, which could indicate a strategic effort to strengthen the balance sheet and reduce financial risk over the evaluation period.
- Return on Equity (ROE)
- Return on equity begins at 35.46% in early 2021, experiencing a rise to a high of 43.52% in the third quarter of 2022. After this peak, the ratio slightly declines but remains robust, fluctuating around the 40% to 42% range through mid-2025. This sustained high ROE suggests continued effectiveness in generating returns for shareholders, supported by the combined dynamics of profitability, asset efficiency, and changing leverage.
Five-Component Disaggregation of ROE
Coca-Cola Co., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Tax Burden
- The tax burden ratio shows a gradual increase from 0.74-0.76 levels in early 2021 to a more consistent range around 0.81-0.84 during the period from late 2021 through 2025. This indicates a slight increase in the proportion of earnings retained after taxes over time, suggesting an improving tax efficiency or a relatively stable tax environment.
- Interest Burden
- The interest burden ratio rose steadily from approximately 0.83 in mid-2021 to about 0.89-0.91 levels post-2022, with minor fluctuations. This trend implies a slight reduction in interest expenses relative to earnings before interest and taxes, positively impacting profitability.
- EBIT Margin
- Operating profitability as measured by EBIT margin declined from a peak near 36% in late 2021 to a low around 29% in late 2022, followed by a recovery trend reaching approximately 36.7% by late 2025. This U-shaped movement suggests the company experienced margin pressure possibly due to cost increases or pricing challenges in 2022, later offset by operational improvements or higher revenue quality.
- Asset Turnover
- Asset turnover improved steadily from 0.37 in early 2021 to roughly 0.45-0.47 subsequently. This indicates enhanced efficiency in utilizing assets to generate sales, reflecting positively on operational effectiveness over the time span analyzed.
- Financial Leverage
- Financial leverage displayed a notable downward trend from above 4.4 in early 2021 to around 3.4 by late 2025. The consistent reduction suggests decreasing reliance on debt financing and a strengthening equity base, potentially signaling a strategic move toward lower financial risk.
- Return on Equity (ROE)
- ROE exhibited an overall upward trend, rising from approximately 35.5% in early 2021 to peaks above 42% between 2022 and 2025, notwithstanding some fluctuations. This improvement reflects enhanced profitability relative to shareholders’ equity, driven by factors including margin recovery, asset efficiency gains, and prudent leverage management.
- Summary
- Across the analyzed period, the data reveals a company navigating margin compression early in the timeframe, followed by operational recovery and efficiency improvements. The reductions in financial leverage suggest a deliberate focus on lowering funding risk, while stable tax and interest burdens support profitability. Collectively, these trends contribute to a solid return on equity performance, underscoring effective management of both operations and capital structure.
Two-Component Disaggregation of ROA
Coca-Cola Co., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Net Profit Margin
- The net profit margin exhibits an overall upward trend with fluctuations across periods. Starting at 21.59% in early 2021, the margin peaks at 25.69% in the second quarter of 2022, followed by a decline and a period of relative stability around 22-23% throughout 2023 and into early 2024. From mid-2024 to late 2025, the margin resumes a rising trajectory, reaching a high of 27.34% by the third quarter of 2025. This pattern suggests phases of enhanced profitability interspersed with moderate contractions, culminating in notable improvement towards the end of the observed timeline.
- Asset Turnover
- Asset turnover shows a gradual increase from 0.37 in the first quarter of 2021 to a peak around 0.47 in early 2024 and mid-2024. After this peak, the ratio slightly decreases and stabilizes near 0.45 towards the end of 2025. The data indicates consistent and modest improvements in the efficiency of asset utilization to generate sales over the period, with only minor declines during the last intervals.
- Return on Assets (ROA)
- Return on assets steadily improves from 8.02% in early 2021 to 10.96% in the first quarter of 2022, demonstrating enhanced overall profitability relative to total assets. The ROA remains generally stable, fluctuating between approximately 10% and 11% through 2023 and much of 2024. Notably, there is a marked increase starting from late 2024, culminating in a peak of 12.29% by the third quarter of 2025. This indicates not only effective utilization of assets but also growing profitability over time.
- Summary Insights
- The financial metrics collectively indicate improving profitability and operational efficiency over the observed quarters. The net profit margin and ROA show positive long-term growth with some intermediate volatility, implying successful management of costs and asset base. Asset turnover improvements corroborate enhanced sales generation relative to assets held. The substantial gains in profit margin and ROA towards the end point to strengthening financial performance, which may reflect favorable market conditions, operational optimizations, or pricing strategies implemented during these periods.
Four-Component Disaggregation of ROA
Coca-Cola Co., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Tax Burden Ratio
- The tax burden ratio shows a generally stable trend over the periods, starting around 0.74-0.76 in early 2021. It increases slightly to peak at roughly 0.84 by early 2024, followed by a minor decline settling near 0.81-0.82 thereafter. This indicates relatively consistent effective taxation levels with modest fluctuations but no significant volatility.
- Interest Burden Ratio
- The interest burden ratio starts at 0.85 in the initial quarter and demonstrates a gradual upward trend, reaching about 0.94 in late 2022 before stabilizing around 0.89-0.91 in subsequent periods. This suggests a modest improvement in the company's ability to cover interest expenses from its earnings before interest and taxes, reflecting potentially favorable debt management or lower effective interest costs.
- EBIT Margin
- The EBIT margin exhibits variability with an initial peak near 36% in 2021, followed by a notable decline to around 29-30% by the end of 2022. Subsequently, it recovers gradually, rising above 35% again by the final periods of 2025. This pattern indicates an initial pressure on operating profitability, possibly due to cost increases or pricing pressures, followed by a recovery phase suggesting improved operational efficiency or revenue growth contributing to margin expansion.
- Asset Turnover
- Asset turnover shows a positive trend overall, beginning at approximately 0.37 and increasing steadily to around 0.46-0.47 in most recent periods. This trend points to enhanced efficiency in utilizing assets to generate revenue, reflecting better asset management or increased sales relative to asset base during the timeframe analyzed.
- Return on Assets (ROA)
- ROA rises from about 8% in early 2021 to peak values exceeding 12% by late 2025, demonstrating a consistent overall improvement in asset profitability. The increase aligns with improvements in both EBIT margin and asset turnover metrics, highlighting enhanced operational performance and more effective use of assets to generate earnings.
Disaggregation of Net Profit Margin
Coca-Cola Co., decomposition of net profit margin ratio (quarterly data)
Based on: 10-Q (reporting date: 2025-09-26), 10-Q (reporting date: 2025-06-27), 10-Q (reporting date: 2025-03-28), 10-K (reporting date: 2024-12-31), 10-Q (reporting date: 2024-09-27), 10-Q (reporting date: 2024-06-28), 10-Q (reporting date: 2024-03-29), 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-29), 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: 2022-07-01), 10-Q (reporting date: 2022-04-01), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-10-01), 10-Q (reporting date: 2021-07-02), 10-Q (reporting date: 2021-04-02).
- Tax Burden
- The tax burden ratio exhibits a generally stable pattern over the observed periods, fluctuating within a narrow range from 0.74 to 0.84. Starting near 0.76, it incrementally increased over time, reaching values slightly above 0.82 in the latter quarters. This indicates a relatively consistent proportion of earnings being retained after taxes, with a minor upward trend suggestive of a gradual increase in effective tax rate absorption.
- Interest Burden
- The interest burden ratio shows a mild upward trend from 0.83 to approximately 0.91. It peaked around the middle of the period near 0.94 but generally maintained values close to or just below that level before settling near 0.9 to 0.91. This pattern suggests manageable interest expenses relative to earnings before interest and taxes, with a slight increase in the interest burden over the quarters.
- EBIT Margin
- The EBIT margin percentage reveals a notable fluctuation throughout the periods analyzed. Initially, margins were strong, peaking close to 36%. However, a substantive decline is observed around mid-period, dropping to values near 29%, indicating a reduction in operating profitability. Towards the end of the timeline, EBIT margin recovers, rising steadily to exceed 36% again in the final quarter. The overall trend indicates a temporary contraction in operating efficiency followed by a robust recovery.
- Net Profit Margin
- The net profit margin percentage follows a generally positive trajectory with some oscillations. It begins at around 21.5%, rises to a peak exceeding 25% during the mid-period, then experiences a moderate dip, and finally ascends again to reach approximately 27.3%. This upward movement reflects improving profitability after all expenses, including interest and taxes, suggesting enhanced bottom-line performance over the entire period.