Stock Analysis on Net
Stock Analysis on Net

Mastercard Inc. (NYSE:MA)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin 

Microsoft Excel LibreOffice Calc

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

Two-Component Disaggregation of ROE

Mastercard Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Dec 31, 2021 118.80% = 23.06% × 5.15
Dec 31, 2020 100.31% = 19.09% × 5.25
Dec 31, 2019 137.76% = 27.77% × 4.96
Dec 31, 2018 108.60% = 23.57% × 4.61
Dec 31, 2017 71.60% = 18.36% × 3.90

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

Mastercard Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2021 118.80% = 46.00% × 0.50 × 5.15
Dec 31, 2020 100.31% = 41.90% × 0.46 × 5.25
Dec 31, 2019 137.76% = 48.08% × 0.58 × 4.96
Dec 31, 2018 108.60% = 39.19% × 0.60 × 4.61
Dec 31, 2017 71.60% = 31.33% × 0.59 × 3.90

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

Mastercard Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2021 118.80% = 0.84 × 0.96 × 56.86% × 0.50 × 5.15
Dec 31, 2020 100.31% = 0.83 × 0.95 × 53.20% × 0.46 × 5.25
Dec 31, 2019 137.76% = 0.83 × 0.98 × 58.96% × 0.58 × 4.96
Dec 31, 2018 108.60% = 0.81 × 0.97 × 49.43% × 0.60 × 4.61
Dec 31, 2017 71.60% = 0.60 × 0.98 × 53.42% × 0.59 × 3.90

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in return on equity ratio (ROE) over 2021 year is the increase in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

Mastercard Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2021 23.06% = 46.00% × 0.50
Dec 31, 2020 19.09% = 41.90% × 0.46
Dec 31, 2019 27.77% = 48.08% × 0.58
Dec 31, 2018 23.57% = 39.19% × 0.60
Dec 31, 2017 18.36% = 31.33% × 0.59

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in return on assets ratio (ROA) over 2021 year is the increase in asset turnover ratio.

Four-Component Disaggregation of ROA

Mastercard Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2021 23.06% = 0.84 × 0.96 × 56.86% × 0.50
Dec 31, 2020 19.09% = 0.83 × 0.95 × 53.20% × 0.46
Dec 31, 2019 27.77% = 0.83 × 0.98 × 58.96% × 0.58
Dec 31, 2018 23.57% = 0.81 × 0.97 × 49.43% × 0.60
Dec 31, 2017 18.36% = 0.60 × 0.98 × 53.42% × 0.59

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in return on assets ratio (ROA) over 2021 year is the increase in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

Mastercard Inc., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2021 46.00% = 0.84 × 0.96 × 56.86%
Dec 31, 2020 41.90% = 0.83 × 0.95 × 53.20%
Dec 31, 2019 48.08% = 0.83 × 0.98 × 58.96%
Dec 31, 2018 39.19% = 0.81 × 0.97 × 49.43%
Dec 31, 2017 31.33% = 0.60 × 0.98 × 53.42%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

The primary reason for the increase in net profit margin ratio over 2021 year is the increase in operating profitability measured by EBIT margin ratio.