Two-Component Disaggregation of ROE

Danaher Corp., decomposition of ROE

 
ROE = ROA × Leverage
Dec 31, 2017 9.45% 5.34% 1.77
Dec 31, 2016 11.10% 5.64% 1.97
Dec 31, 2015 14.17% 6.96% 2.04
Dec 31, 2014 11.11% 7.02% 1.58
Dec 31, 2013 12.04% 7.77% 1.55

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in Financial Leverage.

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Three-Component Disaggregation of ROE

Danaher Corp., decomposition of ROE

 
ROE = Net Profit Margin × Asset Turnover × Leverage
Dec 31, 2017 9.45% 13.60% 0.39 1.77
Dec 31, 2016 11.10% 15.13% 0.37 1.97
Dec 31, 2015 14.17% 16.33% 0.43 2.04
Dec 31, 2014 11.11% 13.05% 0.54 1.58
Dec 31, 2013 12.04% 14.10% 0.55 1.55

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in Financial Leverage.

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Five-Component Disaggregation of ROE

Danaher Corp., decomposition of ROE

 
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Dec 31, 2017 9.45% 0.84 0.95 17.04% 0.39 1.77
Dec 31, 2016 11.10% 0.85 0.94 18.93% 0.37 1.97
Dec 31, 2015 14.17% 0.82 0.96 20.65% 0.43 2.04
Dec 31, 2014 11.11% 0.75 0.97 18.10% 0.54 1.58
Dec 31, 2013 12.04% 0.76 0.96 19.42% 0.55 1.55

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Return on Equity (ROE) over 2017 year is the decrease in Financial Leverage.

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Two-Way Decomposition of ROA

Danaher Corp., decomposition of ROA

 
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2017 5.34% 13.60% 0.39
Dec 31, 2016 5.64% 15.13% 0.37
Dec 31, 2015 6.96% 16.33% 0.43
Dec 31, 2014 7.02% 13.05% 0.54
Dec 31, 2013 7.77% 14.10% 0.55

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Return on Assets (ROA) over 2017 year is the decrease in profitability measured by Net Profit Margin.

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Four-Way Decomposition of ROA

Danaher Corp., decomposition of ROA

 
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2017 5.34% 0.84 0.95 17.04% 0.39
Dec 31, 2016 5.64% 0.85 0.94 18.93% 0.37
Dec 31, 2015 6.96% 0.82 0.96 20.65% 0.43
Dec 31, 2014 7.02% 0.75 0.97 18.10% 0.54
Dec 31, 2013 7.77% 0.76 0.96 19.42% 0.55

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Return on Assets (ROA) over 2017 year is the decrease in operating profitability measured by EBIT Margin.

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Decomposition of Net Profit Margin

Danaher Corp., decomposition of Net Profit Margin

 
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2017 13.60% 0.84 0.95 17.04%
Dec 31, 2016 15.13% 0.85 0.94 18.93%
Dec 31, 2015 16.33% 0.82 0.96 20.65%
Dec 31, 2014 13.05% 0.75 0.97 18.10%
Dec 31, 2013 14.10% 0.76 0.96 19.42%

Source: Based on data from Danaher Corp. Annual Reports

 

The primary reason for the decrease in Net Profit Margin over 2017 year is the decrease in operating profitability measured by EBIT Margin.

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