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
Dell Technologies Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-05-02), 10-K (reporting date: 2025-01-31), 10-Q (reporting date: 2024-11-01), 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
- Return on Assets (ROA)
- The ROA shows data starting from January 31, 2020, with an initial value of 3.88%. It experiences a slight decline through mid to late 2020, reaching a low of 1.73% on October 30, 2020. Following this period, ROA demonstrates a recovery trend, increasing steadily to peak around 6.5% in October 2022. Subsequently, it drops to approximately 2.15% by February 2023 but then gradually rises again, maintaining a generally upward trajectory toward 5.29% by May 2025. This pattern indicates phases of both contraction and recovery, with an overall positive trend in asset profitability over the longer term.
- Financial Leverage
- Financial leverage data is only available intermittently, beginning with an extremely high ratio of 134.71 in January 29, 2021. Thereafter, leverage declines sharply over the subsequent quarters, falling to 49.78 in April 30, 2021, then 34.92 in July 30, 2021, and further down to 15.15 by January 28, 2022. The data beyond early 2022 is missing, so further trend analysis is limited. However, the observed decrease suggests a reduction in reliance on debt relative to equity during this early period.
- Return on Equity (ROE)
- ROE figures are recorded from January 29, 2021 onward. It starts at a high 275.31%, then decreases sharply over the next few quarters to 131.1%, 114.54%, 78.28%, and 75.81%, with no data following January 28, 2022. Despite the significant reduction, the values remain elevated, implying sustained strong profitability for shareholders during this timeframe. The declining trend may reflect the concurrent decrease in financial leverage, indicating a shift in the company’s capital structure and possibly lower financial risk.
Three-Component Disaggregation of ROE
Dell Technologies Inc., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-05-02), 10-K (reporting date: 2025-01-31), 10-Q (reporting date: 2024-11-01), 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
- Net Profit Margin
- The net profit margin is not available for the initial periods but starts from May 1, 2020, at 5.01%. It then shows a declining trend reaching a low of 1.74% by October 28, 2022. After this trough, the margin gradually improves, rising steadily to 4.75% by May 3, 2024. This pattern indicates a period of reduced profitability during 2021-2022, followed by a recovery phase in 2023 and early 2024.
- Asset Turnover
- The asset turnover ratio begins around 0.78 in May 2020 and slightly fluctuates within a narrow range, dipping to a low of 0.73 in January 2022. Notably, a significant increase is observed in the subsequent quarters, peaking at 1.24 in October 28, 2022. After this peak, the ratio slightly decreases and stabilizes around 1.1 to 1.2 through early 2025. This indicates an improvement in the efficiency with which the company uses its assets to generate revenue starting in late 2021.
- Financial Leverage
- Financial leverage data is limited but shows an extreme value of 134.71 in January 29, 2021, which rapidly decreases in the following quarters to 15.15 by April 29, 2022. The sharp decline suggests a significant reduction in the company’s use of debt relative to equity over this period, reflecting possible deleveraging or equity increases to strengthen the capital structure.
- Return on Equity (ROE)
- The ROE figures, available from January 29, 2021, start exceptionally high at 275.31%, followed by a significant decrease over the next quarters to 75.81% in April 29, 2022. After this, data is unavailable, but the initial values imply considerable volatility in returns to shareholders during this period, possibly linked to changes in leverage and profitability metrics.
- Overall Insights
- The financial performance shows a phase of high volatility especially between early 2021 and mid-2022, marked by elevated ROE and financial leverage that rapidly normalize afterward. Profitability, as indicated by the net profit margin, diminished during 2021-2022 but recovered gradually starting late 2022. Concurrently, asset turnover improved significantly from early 2022, indicating enhanced operational efficiency. The combined trends suggest restructuring or strategic adjustments aimed at reducing financial risk and improving operational performance, resulting in steadier profit margins and asset utilization towards 2024 and 2025.
Two-Component Disaggregation of ROA
Dell Technologies Inc., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-05-02), 10-K (reporting date: 2025-01-31), 10-Q (reporting date: 2024-11-01), 10-Q (reporting date: 2024-08-02), 10-Q (reporting date: 2024-05-03), 10-K (reporting date: 2024-02-02), 10-Q (reporting date: 2023-11-03), 10-Q (reporting date: 2023-08-04), 10-Q (reporting date: 2023-05-05), 10-K (reporting date: 2023-02-03), 10-Q (reporting date: 2022-10-28), 10-Q (reporting date: 2022-07-29), 10-Q (reporting date: 2022-04-29), 10-K (reporting date: 2022-01-28), 10-Q (reporting date: 2021-10-29), 10-Q (reporting date: 2021-07-30), 10-Q (reporting date: 2021-04-30), 10-K (reporting date: 2021-01-29), 10-Q (reporting date: 2020-10-30), 10-Q (reporting date: 2020-07-31), 10-Q (reporting date: 2020-05-01), 10-K (reporting date: 2020-01-31), 10-Q (reporting date: 2019-11-01), 10-Q (reporting date: 2019-08-02), 10-Q (reporting date: 2019-05-03).
- Net Profit Margin
- The net profit margin displays a variable but generally positive trend over the observed periods. Initial values appear absent, but from May 2020 onward, it fluctuates between a low of approximately 1.74% (October 2022) and a high of 6.83% (October 2021). There is a notable peak around late 2021, followed by a dip in early 2023, and then a steady recovery trend through 2024 and into May 2025, where the margin stabilizes near 4.75% to 4.81%. This indicates periodic improvement in profitability relative to sales, despite intermittent volatility.
- Asset Turnover
- The asset turnover ratio shows a relatively stable pattern with subtle fluctuations. Starting slightly below 0.8 in mid-2020, it dips to around 0.73 in early 2022 but then experiences a marked increase, reaching a peak of 1.24 in early 2023. Following this peak, the ratio slightly declines and stabilizes between 1.08 and 1.20 throughout 2023 and into 2025. This pattern suggests increasing efficiency in asset usage beginning in 2021, peaking in early 2023, and maintaining a higher level of efficiency compared to the earlier periods.
- Return on Assets (ROA)
- Return on assets exhibits an overall upward trend with some fluctuations. It starts from early values near 3.88% in May 2020, then dips to a low around 1.73% by October 2020, before progressively increasing to a peak of about 6.5% in October 2021. Subsequently, ROA declines noticeably through early 2023, reaching approximately 2.15%, but then recovers steadily to about 5.29% by May 2025. This trend parallels movements in net profit margin and asset turnover, reflecting overall enhancements in asset profitability, although recovery after the 2021 peak is gradual.
- Summary
- The financial ratios collectively indicate periods of improved operational efficiency and profitability around late 2021, followed by a phase of contraction into early 2023. However, from 2023 onward, a recovery trend is evident across net profit margin, asset turnover, and return on assets, suggesting enhanced managerial effectiveness and better utilization of resources. The return to near-peak or improved levels by mid-2025 implies a positive outlook on profitability and asset productivity within the latest periods.