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Microsoft Excel LibreOffice Calc


DuPont Analysis: Decomposition of ROE

Difficulty: Beginner


Two-Component Disaggregation of ROE

Emerson Electric Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Leverage
Sep 30, 2017 hidden% hidden% hidden
Sep 30, 2016 hidden% hidden% hidden
Sep 30, 2015 hidden% hidden% hidden
Sep 30, 2014 hidden% hidden% hidden
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Sep 30, 2012 hidden% hidden% hidden

Source: Based on data from Emerson Electric Co. Annual Reports

 

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


Three-Component Disaggregation of ROE

Emerson Electric Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Leverage
Sep 30, 2017 hidden% hidden% hidden hidden
Sep 30, 2016 hidden% hidden% hidden hidden
Sep 30, 2015 hidden% hidden% hidden hidden
Sep 30, 2014 hidden% hidden% hidden hidden
Sep 30, 2013 hidden% hidden% hidden hidden
Sep 30, 2012 hidden% hidden% hidden hidden

Source: Based on data from Emerson Electric Co. Annual Reports

 

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


Five-Component Disaggregation of ROE

Emerson Electric Co., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
Sep 30, 2017 hidden% hidden hidden hidden% hidden hidden
Sep 30, 2016 hidden% hidden hidden hidden% hidden hidden
Sep 30, 2015 hidden% hidden hidden hidden% hidden hidden
Sep 30, 2014 hidden% hidden hidden hidden% hidden hidden
Sep 30, 2013 hidden% hidden hidden hidden% hidden hidden
Sep 30, 2012 hidden% hidden hidden hidden% hidden hidden

Source: Based on data from Emerson Electric Co. Annual Reports

 

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


Two-Way Decomposition of ROA

Emerson Electric Co., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Sep 30, 2017 hidden% hidden% hidden
Sep 30, 2016 hidden% hidden% hidden
Sep 30, 2015 hidden% hidden% hidden
Sep 30, 2014 hidden% hidden% hidden
Sep 30, 2013 hidden% hidden% hidden
Sep 30, 2012 hidden% hidden% hidden

Source: Based on data from Emerson Electric Co. Annual Reports

 

The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in Asset Turnover.


Four-Way Decomposition of ROA

Emerson Electric Co., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Sep 30, 2017 hidden% hidden hidden hidden% hidden
Sep 30, 2016 hidden% hidden hidden hidden% hidden
Sep 30, 2015 hidden% hidden hidden hidden% hidden
Sep 30, 2014 hidden% hidden hidden hidden% hidden
Sep 30, 2013 hidden% hidden hidden hidden% hidden
Sep 30, 2012 hidden% hidden hidden hidden% hidden

Source: Based on data from Emerson Electric Co. Annual Reports

 

The primary reason for the increase in Return on Assets (ROA) over 2017 year is the increase in efficiency measured by Asset Turnover.


Decomposition of Net Profit Margin

Emerson Electric Co., decomposition of Net Profit Margin

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Sep 30, 2017 hidden% hidden hidden hidden%
Sep 30, 2016 hidden% hidden hidden hidden%
Sep 30, 2015 hidden% hidden hidden hidden%
Sep 30, 2014 hidden% hidden hidden hidden%
Sep 30, 2013 hidden% hidden hidden hidden%
Sep 30, 2012 hidden% hidden hidden hidden%

Source: Based on data from Emerson Electric Co. 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.