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
Eaton Corp. plc, 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).
- Return on Assets (ROA)
- The ROA demonstrates a consistent upward trend beginning from the first available data point in March 31, 2020, at 4.43%. It shows steady growth over the subsequent periods, reaching a peak of 10.04% by December 31, 2024. However, in the last period ending June 30, 2025, there is a slight decrease to 9.69%. Overall, this reflects improving efficiency in asset utilization to generate profit over time, with a minor recent decline.
- Financial Leverage
- Financial leverage values start at 2.17 in March 31, 2020, and display small fluctuations over the periods analyzed. The ratio decreases gradually after June 30, 2021, reaching a low of 2.00 by March 31, 2024. Following this low, there is a subtle upward movement again, ending at 2.18 by June 30, 2025. This trend indicates a moderate reduction in reliance on debt financing in the mid-periods, followed by a cautious increase towards the end.
- Return on Equity (ROE)
- ROE shows a continuous increase from 9.44% recorded in March 31, 2020, to a high of 21.27% by March 31, 2025. This trend suggests that the company has been increasingly effective in generating shareholder returns. Although the values slightly decrease to 21.10% in the last period ending June 30, 2025, the overall trajectory remains strongly positive, reflecting successful equity utilization and profitability growth.
- Summary Insights
- The data illustrates sustained improvement in both ROA and ROE over the examined periods, indicating enhancements in both operational efficiency and profitability for shareholders. Financial leverage trends suggest a strategic approach to managing debt levels, maintaining them within a narrow range with moderate decreases and increases over time. The minor decreases observed at the most recent data points for ROA and ROE may warrant monitoring but do not currently indicate a reversal of the general positive performance trajectory.
Three-Component Disaggregation of ROE
Eaton Corp. plc, 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
- The net profit margin demonstrates a clear upward trajectory starting from 7.9% in the first quarter of 2021, increasing steadily to a peak of 15.55% in the third quarter of 2025. Minor fluctuations are observed, with slight decreases in the final observed quarters, but the overall pattern indicates improved profitability over the period analyzed.
- Asset Turnover
- The asset turnover ratio remained relatively stable, with modest progression from approximately 0.56 in early 2021 to around 0.64 by the end of 2025. There are minor volatility and fluctuations within this range, but the general trend suggests slightly enhanced efficiency in the use of assets to generate sales.
- Financial Leverage
- Financial leverage ratios exhibit a downward trend from early 2020 levels of approximately 2.17 to a low near 2.00 by the first half of 2024, followed by a gradual increase towards 2.18 at the end of the assessment period. This indicates an initially reduced reliance on debt financing which then modestly increased in later periods.
- Return on Equity (ROE)
- Return on equity shows significant growth over the available quarters starting at 9.44% in early 2021 and reaching approximately 21.10% by the first quarter of 2025. This positive trend reflects increased profitability relative to shareholder equity, supported by improving net profit margins and steady asset turnover.
Five-Component Disaggregation of ROE
Eaton Corp. plc, 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).
- Tax Burden
- The tax burden ratio displays a moderately stable pattern beginning from the quarter ending March 31, 2021. After an initial rise from 0.81 to 0.86, it fluctuates narrowly between 0.73 and 0.85 across subsequent quarters. For the most recent periods, the ratio holds steady around 0.83 to 0.84, indicating consistent tax expense management relative to pre-tax earnings.
- Interest Burden
- The interest burden ratio shows a gradual but clear upward trend from March 31, 2021 through June 30, 2025. Starting at 0.92, it steadily increases to a peak near 0.98 around the end of 2024, followed by a slight normalization to approximately 0.96. This trend suggests a gradual reduction in interest expense relative to earnings before interest and taxes, reflecting potentially improved debt servicing or refinancing conditions.
- EBIT Margin
- The EBIT margin demonstrates a significant upward trajectory from the quarter ending March 31, 2021 onward. Beginning at approximately 10.58%, the margin rises steadily to reach a peak of 19.24% by the third quarter of 2024, with some minor fluctuations thereafter. This improvement illustrates enhanced operational efficiency or favorable product mix effects, contributing positively to profitability.
- Asset Turnover
- Starting from early 2021, asset turnover experiences a generally increasing trend from around 0.56 to a high near 0.65 in late 2024. A slight dip follows afterward but remains above the initial baseline. This upward pattern reflects more efficient use of assets in generating sales, indicating operational improvements or better asset management practices.
- Financial Leverage
- Financial leverage remains relatively stable, fluctuating slightly between 2.17 and 2.18 over the entire period. Minor declines are observed mid-period but reversed later, suggesting consistent use of debt relative to equity. Overall, leverage levels are maintained without significant shifts, implying a steady capital structure policy.
- Return on Equity (ROE)
- ROE shows a pronounced upward trend beginning in the first quarter of 2021. Rising from 9.44%, the return escalates continually to exceed 21% by early 2025. This substantial improvement is supported by the combined effects of higher EBIT margins, increasing asset turnover, stable leverage, and improving interest burden, indicating stronger profitability and efficient equity utilization.
Two-Component Disaggregation of ROA
Eaton Corp. plc, 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).
- Net Profit Margin
- The net profit margin demonstrates a consistent upward trend from the initial positive value of 7.9% in March 2020, reaching 15.11% by June 2025. After beginning to register values from March 2020, the margin showed steady improvement each quarter, indicating enhanced profitability over time. The increase was relatively smooth with minor fluctuations, peaking at 15.55% in December 2024 before a slight decline to 15.11%.
- Asset Turnover
- The asset turnover ratio started at 0.56 in March 2020 and displayed minor fluctuations around this level initially, dipping slightly to 0.52 in mid-2020 and thereafter recovering. From late 2020 onward, there was a gradual and steady increase to 0.64 by June 2025. This upward movement suggests improved efficiency in using assets to generate sales, although the improvement is moderate compared to profitability metrics.
- Return on Assets (ROA)
- The return on assets aligns with trends in both net profit margin and asset turnover, rising steadily from 4.43% in March 2020 to 9.69% by June 2025. The increase was consistent, showing a strengthening ability to generate earnings relative to the asset base. The most notable increments occur post-2021, indicative of operational improvements or strategic initiatives enhancing asset utilization and profitability simultaneously.
Four-Component Disaggregation of ROA
Eaton Corp. plc, 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).
- Tax Burden
- The tax burden ratio shows a generally stable pattern from March 2021 through June 2025, maintaining a level close to 0.83-0.85. Initial values in 2021 fluctuate modestly between 0.73 and 0.86 but then settle into a consistent range around 0.84 thereafter.
- Interest Burden
- The interest burden ratio demonstrates a gradual increase over the observed periods. Beginning at 0.92 in March 2021, it incrementally rises to peak near 0.98 in December 2024. After this peak, values stabilize slightly below at approximately 0.96-0.97 up to June 2025, indicating improved capacity to cover interest expenses from operating income over time.
- EBIT Margin
- The EBIT margin presents a clear upward trend over the period documented. Starting at just over 10.5% in early 2021, the margin climbs steadily, exceeding 15% by the third quarter of 2021, and continuing to increase thereafter. By March 2025, the margin reaches nearly 19%, reflecting improving operational profitability and efficiency.
- Asset Turnover
- The asset turnover ratio exhibits mild fluctuations but generally shows a modest improvement. Initially below 0.6 in early 2021, it advances gradually to reach around 0.64-0.65 by mid-2025. This suggests a slight enhancement in the efficiency with which assets generate revenue over time.
- Return on Assets (ROA)
- Return on assets reveals substantial growth throughout the timeframe. From approximately 4.4% in early 2021, the ROA consistently increases, reaching over 9.6% by late 2024. Despite a small dip to 9.69% in mid-2025, the trend indicates a robust strengthening in the company’s ability to generate profits from its assets, paralleling improvements in EBIT margin and asset turnover.
Disaggregation of Net Profit Margin
Eaton Corp. plc, decomposition of net profit margin ratio (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).
- Tax Burden Ratio
- The tax burden ratio shows a relatively stable trend from March 31, 2021, through June 30, 2025. Initial values were around 0.81 to 0.86 in early 2021, followed by a slight dip to approximately 0.73 by December 31, 2021. After this period, the ratio gradually increased to around 0.85 by December 31, 2022. From then onwards, it oscillated minimally in a narrow range near 0.83 to 0.84, indicating consistency in the tax liability relative to pretax earnings over time.
- Interest Burden Ratio
- The interest burden ratio remained fairly constant, with values mostly between 0.92 and 0.98 across the observed periods starting March 31, 2021. A subtle upward trajectory is noticeable, moving from approximately 0.92 in early 2021 to 0.96-0.97 by mid-2024 and slightly fluctuating around 0.96 toward June 30, 2025. This suggests that the impact of interest expense on operating income has been stable with marginal improvement, likely reflecting controlled interest costs or steady debt levels.
- EBIT Margin (%)
- The EBIT margin displays a consistent positive trend, signifying improving operational efficiency and profitability before interest and taxes. Starting at about 10.58% in March 2021, it increased steadily, reaching above 16% in the early quarters of 2022. Following a modest decline toward the end of 2022 to about 13.95%, it then resumed an upward trend, culminating near 19.24% in September 2024 before a slight dip to 18.87% by June 2025. This pattern indicates effective cost management and revenue growth over the multi-year horizon.
- Net Profit Margin (%)
- The net profit margin reflects a clear upward trend throughout the analyzed periods. Beginning around 7.9% in the first quarter of 2021, it increased steadily, surpassing 11% by the end of 2021. The margin continued to improve, reaching approximately 13.24% by December 2023 and peaking near 15.55% in June 2025. The gradual enhancement in net profitability points to successful operational control, favorable tax and interest expenses, and potentially increased revenue quality.