DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Paying user area
Try for free
Corning Inc. pages available for free this week:
- Analysis of Liquidity Ratios
- Analysis of Solvency Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Present Value of Free Cash Flow to Equity (FCFE)
- Selected Financial Data since 2005
- Net Profit Margin since 2005
- Debt to Equity since 2005
- Price to Book Value (P/BV) since 2005
- Analysis of Revenues
The data is hidden behind: . Unhide it.
Get full access to the entire website from $10.42/mo, or
get 1-month access to Corning Inc. for $22.49.
This is a one-time payment. There is no automatic renewal.
We accept:
Two-Component Disaggregation of ROE
Corning Inc., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | |||
| Dec 31, 2022 | = | × | |||
| Dec 31, 2021 | = | × | |||
| Dec 31, 2020 | = | × | |||
| Dec 31, 2019 | = | × |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Return on Assets (ROA)
- The Return on Assets experienced a fluctuating trend over the five-year period. It began at 3.32% in 2019, then decreased significantly to 1.66% in 2020. A notable recovery occurred in 2021, with ROA rising sharply to 6.32%, followed by a decline to 4.46% in 2022, and further down to 2.04% in 2023. This indicates variability in asset profitability, with peak performance in 2021 and a downward trend in the most recent years.
- Financial Leverage
- Financial leverage showed a steady increasing trend over the period, starting at a ratio of 2.24 in 2019 and gradually rising each year to reach 2.47 by the end of 2023. This suggests a modest but consistent increase in the use of debt financing relative to equity over the time span.
- Return on Equity (ROE)
- The Return on Equity displayed significant volatility throughout the five years. The ROE was 7.44% at the end of 2019, declined to 3.86% in 2020, then experienced a sharp increase to 15.45% in 2021. Afterward, it decreased to 10.96% in 2022 and further declined to 5.03% in 2023. This pattern mirrors the fluctuations seen in ROA, indicating varying efficiency in generating returns for shareholders, with a peak in 2021 followed by a falling trend.
Three-Component Disaggregation of ROE
Corning Inc., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Net Profit Margin
- The net profit margin exhibited considerable fluctuations over the examined period. It declined from 8.35% in 2019 to a low of 4.53% in 2020. This was followed by a substantial increase to 13.54% in 2021, indicating improved profitability. Subsequently, it decreased again to 9.27% in 2022 and further to 4.62% in 2023, suggesting volatility and challenges in maintaining consistent profitability.
- Asset Turnover
- The asset turnover ratio showed a moderate upward trend overall. Beginning at 0.40 in 2019, it slightly decreased to 0.37 in 2020 before rising to 0.47 in 2021 and 0.48 in 2022. There was a minor decline to 0.44 in 2023, but the general trend indicates improved efficiency in using assets to generate revenues over the period.
- Financial Leverage
- Financial leverage steadily increased throughout the timeline. From 2.24 in 2019, the ratio rose incrementally each year, reaching 2.47 by 2023. This upward trend indicates a growing use of debt or other liabilities relative to equity, which can imply higher financial risk but also potential for amplified returns.
- Return on Equity (ROE)
- The return on equity pattern closely mirrors the behavior of net profit margin, revealing variability in overall shareholder returns. ROE decreased from 7.44% in 2019 to 3.86% in 2020, surged significantly to 15.45% in 2021, and then declined to 10.96% and 5.03% in the subsequent two years, respectively. This indicates periods of strong performance interspersed with weaker returns, reflecting underlying profitability and leverage dynamics.
Five-Component Disaggregation of ROE
Corning Inc., decomposition of ROE
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Tax Burden
- The tax burden ratio experienced slight fluctuations over the period. Starting at 0.79 in 2019, it increased to a peak of 0.82 in 2020, then decreased to 0.76 in 2022 before rising again slightly to 0.78 in 2023. Overall, the tax burden remained relatively stable with minor variations.
- Interest Burden
- The interest burden ratio showed notable volatility. From 0.85 in 2019, it dropped sharply to 0.69 in 2020, rebounded to 0.89 in 2021, slightly decreased to 0.86 in 2022, and then dropped again to 0.69 in 2023. These fluctuations indicate varying interest expense impact on earnings before tax during the years.
- EBIT Margin
- The EBIT margin exhibited significant variability. It started at 12.49% in 2019, dropped to a low of 7.95% in 2020, then increased substantially to 19.15% in 2021. Following that peak, it declined to 14.23% in 2022 and further to 8.56% in 2023. This suggests uneven profitability from core operations across the periods.
- Asset Turnover
- Asset turnover improved moderately over the timeline, starting at 0.40 in 2019 and slightly decreasing to 0.37 in 2020. It then increased to the highest points of 0.47 and 0.48 in 2021 and 2022 respectively, before a minor reduction to 0.44 in 2023. Overall, asset utilization showed an upward trend with minor setbacks.
- Financial Leverage
- Financial leverage consistently increased during the period under review. Beginning at 2.24 in 2019, it rose steadily each year, reaching 2.47 by 2023. This trend indicates a gradual increase in the use of debt or other liabilities relative to equity.
- Return on Equity (ROE)
- The ROE demonstrated significant fluctuations, mirroring some changes in profitability margins and burdens. It declined markedly from 7.44% in 2019 to 3.86% in 2020. Then, it surged to 15.45% in 2021 before decreasing to 10.96% in 2022 and then falling sharply again to 5.03% in 2023. This volatility reflects inconsistencies in generating shareholder returns over the years.
Two-Component Disaggregation of ROA
Corning Inc., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | |||
| Dec 31, 2022 | = | × | |||
| Dec 31, 2021 | = | × | |||
| Dec 31, 2020 | = | × | |||
| Dec 31, 2019 | = | × |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Net Profit Margin
- The net profit margin shows notable fluctuation over the five-year period. It starts at 8.35% in 2019 and declines sharply to 4.53% in 2020. A significant recovery is observed in 2021, reaching a peak of 13.54%. This is followed by a decline in 2022 to 9.27%, and a further drop in 2023 to 4.62%. The pattern indicates volatility in profitability, with 2021 being an outlier year of strong performance amid otherwise moderate to low margins.
- Asset Turnover
- Asset turnover exhibits a relatively stable trend with minor variations. Starting at 0.40 in 2019, it slightly decreases to 0.37 in 2020, before improving to 0.47 in 2021. The ratio remains almost steady at 0.48 in 2022 and slightly decreases again to 0.44 in 2023. Overall, asset utilization shows a marginal upward trend with some fluctuations, suggesting consistent but modest efficiency in generating revenue from assets.
- Return on Assets (ROA)
- ROA closely mirrors the patterns observed in net profit margin, reflecting profitability linked to assets employed. It drops from 3.32% in 2019 to 1.66% in 2020, then experiences a robust improvement to 6.32% in 2021. This is followed by decreases to 4.46% in 2022 and further down to 2.04% in 2023. The data reveals periods of strong asset profitability in 2021, contrasted with reduced returns in other years, indicating fluctuation in operational effectiveness or market conditions influencing asset yields.
Four-Component Disaggregation of ROA
Corning Inc., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | × | × | |||||
| Dec 31, 2022 | = | × | × | × | |||||
| Dec 31, 2021 | = | × | × | × | |||||
| Dec 31, 2020 | = | × | × | × | |||||
| Dec 31, 2019 | = | × | × | × |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Tax Burden
- The tax burden ratio showed moderate fluctuations during the period from 2019 to 2023. It started at 0.79 in 2019, increased slightly to 0.82 in 2020, then decreased to 0.76 by 2022 before rising again to 0.78 in 2023. Overall, the tax burden remained relatively stable, indicating consistent tax expense management relative to pretax earnings.
- Interest Burden
- The interest burden ratio experienced notable variability. It declined from 0.85 in 2019 to a low of 0.69 in 2020, recovered to 0.89 in 2021, and then decreased again to 0.69 by 2023. These fluctuations suggest variations in interest expenses or changes in earnings before interest and taxes, with increased interest costs or lower EBIT occurring in years with lower ratios.
- EBIT Margin
- The EBIT margin showed significant volatility over the five-year period. After starting at 12.49% in 2019, it dropped sharply to 7.95% in 2020, rebounded strongly to 19.15% in 2021, then declined again to 8.56% in 2023. This indicates varying operating profitability with peaks and troughs likely influenced by changes in revenue or operating expenses.
- Asset Turnover
- Asset turnover maintained a relatively stable trend, beginning at 0.40 in 2019 and peaking at 0.48 in 2022 before slightly declining to 0.44 in 2023. This suggests consistent efficiency in utilizing assets to generate sales, with a temporary improvement in 2021 and 2022.
- Return on Assets (ROA)
- ROA followed a pattern similar to EBIT margin, with fluctuations reflective of changes in profitability and asset utilization. Starting at 3.32% in 2019, ROA decreased to 1.66% in 2020, surged to 6.32% in 2021, then gradually declined to 2.04% by 2023. The variability in ROA aligns with the movements observed in EBIT margin and interest burden, indicating the combined effects of operational performance and financial costs on overall asset returns.
Disaggregation of Net Profit Margin
Corning Inc., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × | ||||
| Dec 31, 2019 | = | × | × |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
- Tax Burden
- The tax burden ratio exhibited moderate fluctuations over the five-year period. It started at 0.79 in 2019, increased slightly to 0.82 in 2020, then declined to 0.80 in 2021. Subsequently, it decreased further to 0.76 in 2022 before rising again to 0.78 in 2023. Overall, the tax burden ratio remained relatively stable within a narrow range, indicating consistent tax expenses relative to pre-tax earnings.
- Interest Burden
- The interest burden ratio showed notable variability, with a decline from 0.85 in 2019 to a low of 0.69 in 2020. It recovered sharply to 0.89 in 2021, followed by a slight decrease to 0.86 in 2022. In 2023, the ratio declined back to 0.69. These fluctuations imply varying interest expenses relative to EBIT, suggesting changes in debt levels or interest rates affecting financial costs during the period.
- EBIT Margin
- The EBIT margin demonstrated considerable volatility. It decreased significantly from 12.49% in 2019 to 7.95% in 2020. This was followed by a robust increase to 19.15% in 2021. The margin then declined to 14.23% in 2022 and further to 8.56% in 2023. The pattern suggests variable operating profitability, with a strong recovery in 2021 but challenges in maintaining higher margins thereafter.
- Net Profit Margin
- The net profit margin followed a pattern similar to the EBIT margin, albeit at lower levels, reflecting the impact of taxes and interest. It dropped from 8.35% in 2019 to 4.53% in 2020. A substantial improvement occurred in 2021, reaching 13.54%. However, the margin declined again to 9.27% in 2022 and further decreased to 4.62% in 2023. This indicates fluctuations in overall profitability, influenced by both operational efficiency and financial costs.