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Lowe’s Cos. Inc. (LOW)
DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
Beginner level
Decomposing ROE involves expressing net income divided by shareholders’ equity as the product of component ratios.
Two-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
ROE | = | ROA | × | Financial Leverage | |
---|---|---|---|---|---|
Feb 1, 2019 | ![]() |
= | ![]() |
× | ![]() |
Feb 2, 2018 | ![]() |
= | ![]() |
× | ![]() |
Feb 3, 2017 | ![]() |
= | ![]() |
× | ![]() |
Jan 29, 2016 | ![]() |
= | ![]() |
× | ![]() |
Jan 30, 2015 | ![]() |
= | ![]() |
× | ![]() |
Jan 31, 2014 | ![]() |
= | ![]() |
× | ![]() |
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.
Three-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
ROE | = | Net Profit Margin | × | Asset Turnover | × | Financial Leverage | |
---|---|---|---|---|---|---|---|
Feb 1, 2019 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Feb 2, 2018 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Feb 3, 2017 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 29, 2016 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 30, 2015 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 31, 2014 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.
Five-Component Disaggregation of ROE
Lowe’s Cos. Inc., decomposition of ROE
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the increase in return on equity ratio (ROE) over 2019 year is the increase in financial leverage ratio.
Two-Component Disaggregation of ROA
Lowe’s Cos. Inc., decomposition of ROA
ROA | = | Net Profit Margin | × | Asset Turnover | |
---|---|---|---|---|---|
Feb 1, 2019 | ![]() |
= | ![]() |
× | ![]() |
Feb 2, 2018 | ![]() |
= | ![]() |
× | ![]() |
Feb 3, 2017 | ![]() |
= | ![]() |
× | ![]() |
Jan 29, 2016 | ![]() |
= | ![]() |
× | ![]() |
Jan 30, 2015 | ![]() |
= | ![]() |
× | ![]() |
Jan 31, 2014 | ![]() |
= | ![]() |
× | ![]() |
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in profitability measured by net profit margin ratio.
Four-Component Disaggregation of ROA
Lowe’s Cos. Inc., decomposition of ROA
ROA | = | Tax Burden | × | Interest Burden | × | EBIT Margin | × | Asset Turnover | |
---|---|---|---|---|---|---|---|---|---|
Feb 1, 2019 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Feb 2, 2018 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Feb 3, 2017 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Jan 29, 2016 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Jan 30, 2015 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Jan 31, 2014 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
× | ![]() |
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the decrease in return on assets ratio (ROA) over 2019 year is the decrease in operating profitability measured by EBIT margin ratio.
Disaggregation of Net Profit Margin
Lowe’s Cos. Inc., decomposition of net profit margin ratio
Net Profit Margin | = | Tax Burden | × | Interest Burden | × | EBIT Margin | |
---|---|---|---|---|---|---|---|
Feb 1, 2019 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Feb 2, 2018 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Feb 3, 2017 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 29, 2016 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 30, 2015 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Jan 31, 2014 | ![]() |
= | ![]() |
× | ![]() |
× | ![]() |
Based on: 10-K (filing date: 2019-04-02), 10-K (filing date: 2018-04-02), 10-K (filing date: 2017-04-04), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31), 10-K (filing date: 2014-03-31).
The primary reason for the decrease in net profit margin ratio over 2019 year is the decrease in operating profitability measured by EBIT margin ratio.