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Exxon Mobil Corp. (XOM)

DuPont Analysis: Decomposition of ROE

Difficulty: Beginner

  • Annual Data
  • Quarterly Data

    • Decomposing ROE involves expressing net income divided by shareholders' equity as the product of component ratios.

    Two-Component Disaggregation of ROE

    Exxon Mobil Corp., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = ROA × Leverage
    Dec 31, 2017 10.50% 5.65% 1.86
    Dec 31, 2016 4.69% 2.37% 1.97
    Dec 31, 2015 9.45% 4.80% 1.97
    Dec 31, 2014 18.65% 9.30% 2.00
    Dec 31, 2013 18.72% 9.39% 1.99

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

    The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in profitability measured by Return on Assets (ROA).

    Three-Component Disaggregation of ROE

    Exxon Mobil Corp., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = Net Profit Margin × Asset Turnover × Leverage
    Dec 31, 2017 10.50% 8.31% 0.68 1.86
    Dec 31, 2016 4.69% 3.59% 0.66 1.97
    Dec 31, 2015 9.45% 6.22% 0.77 1.97
    Dec 31, 2014 18.65% 8.25% 1.13 2.00
    Dec 31, 2013 18.72% 7.74% 1.21 1.99

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

    The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in profitability measured by Net Profit Margin.

    Five-Component Disaggregation of ROE

    Exxon Mobil Corp., decomposition of ROE

    Microsoft Excel LibreOffice Calc
    ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Leverage
    Dec 31, 2017 10.50% 1.06 0.97 8.07% 0.68 1.86
    Dec 31, 2016 4.69% 1.05 0.94 3.61% 0.66 1.97
    Dec 31, 2015 9.45% 0.75 0.99 8.43% 0.77 1.97
    Dec 31, 2014 18.65% 0.64 0.99 12.90% 1.13 2.00
    Dec 31, 2013 18.72% 0.57 1.00 13.51% 1.21 1.99

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

    The primary reason for the increase in Return on Equity (ROE) over 2017 year is the increase in operating profitability measured by EBIT Margin.

    Two-Way Decomposition of ROA

    Exxon Mobil Corp., decomposition of ROA

    Microsoft Excel LibreOffice Calc
    ROA = Net Profit Margin × Asset Turnover
    Dec 31, 2017 5.65% 8.31% 0.68
    Dec 31, 2016 2.37% 3.59% 0.66
    Dec 31, 2015 4.80% 6.22% 0.77
    Dec 31, 2014 9.30% 8.25% 1.13
    Dec 31, 2013 9.39% 7.74% 1.21

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

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

    Four-Way Decomposition of ROA

    Exxon Mobil Corp., decomposition of ROA

    Microsoft Excel LibreOffice Calc
    ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
    Dec 31, 2017 5.65% 1.06 0.97 8.07% 0.68
    Dec 31, 2016 2.37% 1.05 0.94 3.61% 0.66
    Dec 31, 2015 4.80% 0.75 0.99 8.43% 0.77
    Dec 31, 2014 9.30% 0.64 0.99 12.90% 1.13
    Dec 31, 2013 9.39% 0.57 1.00 13.51% 1.21

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

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

    Decomposition of Net Profit Margin

    Exxon Mobil Corp., decomposition of Net Profit Margin

    Microsoft Excel LibreOffice Calc
    Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
    Dec 31, 2017 8.31% 1.06 0.97 8.07%
    Dec 31, 2016 3.59% 1.05 0.94 3.61%
    Dec 31, 2015 6.22% 0.75 0.99 8.43%
    Dec 31, 2014 8.25% 0.64 0.99 12.90%
    Dec 31, 2013 7.74% 0.57 1.00 13.51%

    Based on: 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22), 10-K (filing date: 2016-02-24), 10-K (filing date: 2015-02-25), 10-K (filing date: 2014-02-26).

     

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