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
Eli Lilly & Co., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 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).
- Return on Assets (ROA)
- The return on assets showed a generally fluctuating pattern over the observed periods. Initially, it started around 13%, then experienced a gradual decline through the end of 2021, reaching a low point near 11.44%. In 2022, the ROA was relatively stable, fluctuating slightly around 12%, but declined noticeably in 2023, dropping to as low as 8.19% by the end of that year. However, from 2024 onward, ROA demonstrated a strong recovery trend, increasing steadily and reaching a peak of 16.02% in the third quarter of 2025. This suggests an improvement in asset utilization and profitability in the latter periods.
- Financial Leverage
- Financial leverage exhibited a declining trend from early 2021 through the end of 2021, reducing from approximately 6.79 to 5.44. Throughout 2022 and into early 2023, leverage fluctuated within a narrower range, mostly between 4.65 and 5.94, indicating a more stable capital structure. From mid-2023 until the third quarter of 2025, financial leverage remained relatively consistent, generally maintaining levels between 4.8 and 5.7, with a minor decline toward the end of the observed period. This pattern suggests a moderate and stable reliance on debt financing during the later years.
- Return on Equity (ROE)
- Return on equity demonstrated a significant downward trend from the first quarter of 2021, starting at an elevated level of over 88%, and falling sharply to nearly 44% by the third quarter of 2023. This decline was characterized by some fluctuations but revealed a notable decrease in overall equity profitability. Beginning in 2024, ROE showed a robust recovery, climbing steadily and reaching levels above 77% by mid-2025. The recovery aligns with the improvement observed in ROA, indicating enhanced profitability that benefits shareholder returns despite the relatively stable leverage.
Three-Component Disaggregation of ROE
Eli Lilly & Co., decomposition of ROE (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 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).
- Net Profit Margin
- The net profit margin displayed a declining trend from 23.91% at the beginning of the observed period to a low point around the fourth quarter of 2023 with figures near 15.36%. Subsequently, it began a recovery phase, gradually increasing to reach 30.99% by the third quarter of 2025. This pattern indicates an initial decrease in profitability efficiency followed by a significant improvement over the latter periods.
- Asset Turnover
- Asset turnover remained relatively stable throughout the periods, fluctuating marginally between 0.52 and 0.62. Notably, there was a slight decline in the early 2023 quarters, followed by minor increases and decreases, stabilizing near 0.52 towards the latest periods. Overall, the company's efficiency in utilizing its assets to generate sales maintained a consistent level without major volatility.
- Financial Leverage
- Financial leverage showed a downward trend from an initial 6.79 ratio, declining steadily to approximately 4.65 by the end of 2022. Thereafter, the leverage ratio fluctuated between roughly 4.83 and 5.94, indicating moderate variability but generally lower leverage compared to the early period. This suggests a reduction in reliance on debt or borrowed funds relative to equity over time, with a slight increase in leverage observed in the mid to later periods.
- Return on Equity (ROE)
- Return on equity exhibited a pronounced decrease from an exceptionally high 88.31% in early 2021 down to about 44.46% in the third quarter of 2023. Following this trough, ROE gradually rose, reaching 77.38% by the third quarter of 2025. The trend indicates that the company experienced a significant drop in shareholder returns before initiating a recovery, suggesting improvements in profitability, efficiency, or capital structure later in the timeframe.
Two-Component Disaggregation of ROA
Eli Lilly & Co., decomposition of ROA (quarterly data)
Based on: 10-Q (reporting date: 2025-09-30), 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).
- Net Profit Margin
- The net profit margin exhibits a fluctuating but generally positive trajectory over the analyzed periods. Beginning at 23.91% in March 2021, it decreased gradually, reaching a low around 15.36% in December 2023. Following this, there is a pronounced recovery, climbing sharply to 30.99% by September 2025. This pattern suggests periods of profitability pressure followed by significant margin improvement in recent quarters.
- Asset Turnover
- Asset turnover remains relatively stable throughout the timeframe, with minor fluctuations. Starting at 0.54 in March 2021, it peaked at 0.62 during 2022 mid-year but then trended downward, settling near 0.52 by September 2025. The overall stability indicates consistent asset utilization efficiency with a slight decline in recent periods.
- Return on Assets (ROA)
- The ROA shows a similar pattern to net profit margin but with less volatility. Initial values around 13% decreased to a low of approximately 8.19% in late 2023, followed by steady improvement, reaching 16.02% by September 2025. This trajectory reflects tightening profitability and asset efficiency mid-period, succeeded by enhanced returns in the latest quarters.
- Summary
- Collectively, the data indicates that while asset efficiency as measured by asset turnover remained mostly constant with a slight decline, profitability indicators experienced more marked fluctuations. Both net profit margin and ROA saw declines through 2023 followed by recovery and growth beyond 2024, suggesting operational improvements or favorable market conditions contributing to stronger profitability and asset returns in the most recent periods.