DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
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Two-Component Disaggregation of ROE
Exxon Mobil Corp., decomposition of ROE
| ROE | = | ROA | × | Financial Leverage | |
|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | |||
| Dec 31, 2023 | = | × | |||
| Dec 31, 2022 | = | × | |||
| Dec 31, 2021 | = | × | |||
| Dec 31, 2020 | = | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Return on Assets (ROA)
- The return on assets experienced a significant fluctuation over the observed periods. Starting with a negative value of -6.74% as of December 31, 2020, there was a notable recovery and improvement in 2021, increasing to 6.8%. The upward trend continued sharply in 2022, reaching a peak of 15.1%. However, in subsequent years, ROA showed a declining pattern, decreasing to 9.57% in 2023 and further to 7.43% in 2024. Despite the decline in the latter years, the ROA remained positive and above the levels seen at the start of the period.
- Financial Leverage
- Financial leverage consistently decreased over the analyzed timeframe. Beginning at a ratio of 2.12 in 2020, the leverage ratio steadily declined each year, reaching 1.72 by the end of 2024. This downward pattern indicates a progressive reduction in the use of debt relative to equity, suggesting a more conservative capital structure or deleveraging strategy over time.
- Return on Equity (ROE)
- The return on equity mirrored the trend observed in ROA but with more pronounced changes. ROE was negative at -14.28% in 2020 indicating a period of net losses or diminished shareholder value. Recovery was evident in 2021 with a sharp rise to 13.67%, further accelerating to a peak of 28.58% in 2022. Subsequent years showed a decrease to 17.58% in 2023 and a further decline to 12.77% in 2024. Although ROE decreased after 2022, it remained considerably positive, highlighting a generally favorable return for shareholders compared to the initial period.
Three-Component Disaggregation of ROE
Exxon Mobil Corp., decomposition of ROE
| ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Profit Margin
- The net profit margin exhibited a significant recovery from a negative value of -12.57% in 2020 to positive figures in subsequent years, peaking at 13.98% in 2022. Though the margin decreased somewhat after 2022, it remained positive, registering 10.76% in 2023 and 9.93% in 2024, indicating sustained profitability despite slight declines.
- Asset Turnover
- The asset turnover ratio showed an upward trend from 0.54 in 2020 to a peak of 1.08 in 2022, suggesting improved efficiency in utilizing assets to generate revenue. However, this ratio declined in the following years to 0.89 in 2023 and further to 0.75 in 2024, indicating a reduction in asset utilization efficiency over the last two years.
- Financial Leverage
- Financial leverage demonstrated a consistent decline over the period analyzed, decreasing from 2.12 in 2020 to 1.72 in 2024. This trend reflects a gradual reduction in the company's use of debt relative to equity, potentially indicating a more conservative capital structure or deleveraging efforts.
- Return on Equity (ROE)
- Return on equity experienced a dramatic turnaround from negative -14.28% in 2020 to a strong positive return of 28.58% in 2022. After this peak, ROE declined to 17.58% in 2023 and further to 12.77% in 2024, although it remained notably above the initial negative level. This pattern suggests that the company achieved considerable profitability improvements but faced some challenges in maintaining peak performance.
Five-Component Disaggregation of ROE
Exxon Mobil Corp., decomposition of ROE
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Tax Burden
- The tax burden ratio shows a declining trend from 0.75 in 2021 to 0.70 in 2023, with a slight increase to 0.71 in 2024. This indicates a gradual improvement in tax efficiency over the observed period, with a minor reversal at the end.
- Interest Burden
- The interest burden ratio remained relatively stable, staying close to 0.97-0.99 between 2021 and 2024. This suggests consistent management of interest expenses relative to operating income over the years.
- EBIT Margin
- The EBIT margin exhibits a significant turnaround, beginning with a negative margin of -15.07% in 2020, shifting to positive territory at 11.43% in 2021, and peaking at 19.24% in 2022. However, the margin declined thereafter to 15.62% in 2023 and 14.29% in 2024, indicating volatility but maintaining profitability above 10% after recovery.
- Asset Turnover
- The asset turnover ratio improved notably from 0.54 in 2020 to 1.08 in 2022, reflecting increased operational efficiency in generating revenue from assets. This was followed by a contraction to 0.89 in 2023 and further to 0.75 in 2024, signaling a decrease in asset utilization in the later years.
- Financial Leverage
- Financial leverage steadily decreased from 2.12 in 2020 to 1.72 in 2024, indicating a gradual reduction in the company's reliance on debt financing relative to equity. This trend points to a strengthening equity base or a reduction in debt levels over the period.
- Return on Equity (ROE)
- ROE shows a dramatic improvement from a negative return of -14.28% in 2020 to a peak of 28.58% in 2022. Following this peak, ROE declined to 17.58% in 2023 and further to 12.77% in 2024. Despite the decrease, returns remain positive and significantly above the initial negative level, reflecting improved profitability and equity returns overall.
Two-Component Disaggregation of ROA
Exxon Mobil Corp., decomposition of ROA
| ROA | = | Net Profit Margin | × | Asset Turnover | |
|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | |||
| Dec 31, 2023 | = | × | |||
| Dec 31, 2022 | = | × | |||
| Dec 31, 2021 | = | × | |||
| Dec 31, 2020 | = | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Net Profit Margin
- The net profit margin demonstrated a substantial improvement from a negative figure of -12.57% in 2020 to positive values in subsequent years. It reached a peak of 13.98% in 2022, followed by a gradual decline to 10.76% in 2023 and further to 9.93% in 2024. This trend indicates an initial recovery and profitability growth after 2020, with a slight reduction in profit margin efficiency in the last two years.
- Asset Turnover
- Asset turnover exhibited an upward trend from 0.54 in 2020 to a high of 1.08 in 2022, signaling increased efficiency in using assets to generate sales. However, there was a subsequent decrease to 0.89 in 2023 and 0.75 in 2024. Despite this decline, the ratios in the later years remain higher than the 2020 baseline, suggesting that asset utilization improved overall compared to the starting point.
- Return on Assets (ROA)
- Return on assets improved significantly from -6.74% in 2020 to a peak of 15.1% in 2022, reflecting enhanced profitability relative to assets. Similar to net profit margin and asset turnover, the ROA diminished during the last two periods, registering 9.57% in 2023 and 7.43% in 2024. This pattern highlights a strong rebound followed by a declining yet positive return on asset efficiency in recent years.
Four-Component Disaggregation of ROA
Exxon Mobil Corp., decomposition of ROA
| ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
|---|---|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | × | |||||
| Dec 31, 2023 | = | × | × | × | |||||
| Dec 31, 2022 | = | × | × | × | |||||
| Dec 31, 2021 | = | × | × | × | |||||
| Dec 31, 2020 | = | × | × | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Tax Burden
- The tax burden ratio exhibits a general decreasing trend from 0.75 in 2021 to 0.7 in 2023, followed by a marginal increase to 0.71 in 2024. This indicates a slight reduction in the proportion of earnings retained after taxes over the period, with a minor improvement in the final year.
- Interest Burden
- The interest burden ratio remains relatively stable, fluctuating narrowly between 0.97 and 0.99 over the years 2021 through 2024. This stability highlights consistent interest expense management relative to earnings before interest and taxes.
- EBIT Margin
- The EBIT margin shows significant improvement from a negative value of -15.07% in 2020 to a peak of 19.24% in 2022, indicating a strong recovery and profitability growth. However, subsequent years reveal a decline to 15.62% in 2023 and further to 14.29% in 2024, suggesting some contraction in operating profitability after the peak.
- Asset Turnover
- Asset turnover increases markedly from 0.54 in 2020 to its highest point of 1.08 in 2022, reflecting enhanced efficiency in generating revenue from assets. After 2022, it decreases to 0.89 in 2023 and further to 0.75 in 2024, indicating a reduction in asset utilization efficiency during the latter years.
- Return on Assets (ROA)
- ROA mirrors trends seen in EBIT margin and asset turnover, moving from a negative -6.74% in 2020 to a peak of 15.1% in 2022. Following this peak, a decline occurs with ROA decreasing to 9.57% in 2023 and further to 7.43% in 2024. This pattern suggests that the company’s overall asset profitability improved significantly before moderating in the later years.
Disaggregation of Net Profit Margin
Exxon Mobil Corp., decomposition of net profit margin ratio
| Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
|---|---|---|---|---|---|---|---|
| Dec 31, 2024 | = | × | × | ||||
| Dec 31, 2023 | = | × | × | ||||
| Dec 31, 2022 | = | × | × | ||||
| Dec 31, 2021 | = | × | × | ||||
| Dec 31, 2020 | = | × | × |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Tax Burden
- The tax burden ratio shows a slight downward trend from 0.75 in 2021 to 0.70 in 2023, followed by a minor increase to 0.71 in 2024. This indicates a moderate reduction in the proportion of earnings paid as taxes over the observed period, with a slight rebound in the final year.
- Interest Burden
- The interest burden ratio remains relatively stable throughout the years, fluctuating narrowly between 0.97 and 0.99. This stability suggests consistent management of interest expenses relative to earnings before interest and taxes.
- EBIT Margin
- The EBIT margin shows a significant improvement from a negative margin of -15.07% in 2020 to an increased positive margin, peaking at 19.24% in 2022. Following this peak, there is a decline to 15.62% in 2023 and a further reduction to 14.29% in 2024, indicating that while operational profitability improved substantially compared to 2020, there has been some pressure on operating earnings in the most recent years.
- Net Profit Margin
- The net profit margin follows a similar pattern to the EBIT margin, starting from -12.57% in 2020 and increasing to a high of 13.98% in 2022. Subsequently, it declines to 10.76% in 2023 and further to 9.93% in 2024. This trend reflects an overall recovery and profitability improvement compared to the initial year, though recent years show a decrease in net profitability margins.