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

Two-Component Disaggregation of ROE
Three-Component Disaggregation of ROE
Five-Component Disaggregation of ROE
Two-Component Disaggregation of ROA
Four-Component Disaggregation of ROA
Disaggregation of Net Profit Margin

McDonald’s Corp., decomposition of ROE (quarterly data)


	ROE	=	ROA	×	Financial Leverage
Sep 30, 2020	—	=	9.72%	×	—
Jun 30, 2020	—	=	9.55%	×	—
Mar 31, 2020	—	=	11.48%	×	—
Dec 31, 2019	—	=	12.68%	×	—
Sep 30, 2019	—	=	12.81%	×	—
Jun 30, 2019	—	=	12.77%	×	—
Mar 31, 2019	—	=	12.65%	×	—
Dec 31, 2018	—	=	18.06%	×	—
Sep 30, 2018	—	=	15.29%	×	—
Jun 30, 2018	—	=	16.67%	×	—
Mar 31, 2018	—	=	15.87%	×	—
Dec 31, 2017	—	=	15.36%	×	—
Sep 30, 2017	—	=	17.47%	×	—
Jun 30, 2017	—	=	15.49%	×	—
Mar 31, 2017	—	=	14.87%	×	—
Dec 31, 2016	—	=	15.11%	×	—
Sep 30, 2016	—	=	14.47%	×	—
Jun 30, 2016	739.55%	=	14.28%	×	51.79
Mar 31, 2016	125.36%	=	14.33%	×	8.75
Dec 31, 2015	63.90%	=	11.94%	×	5.35
Sep 30, 2015	—	=	—	×	3.97
Jun 30, 2015	—	=	—	×	3.31
Mar 31, 2015	—	=	—	×	2.82

McDonald’s Corp., decomposition of ROE (quarterly data)


	ROE	=	Net Profit Margin	×	Asset Turnover	×	Financial Leverage
Sep 30, 2020	—	=	25.60%	×	0.38	×	—
Jun 30, 2020	—	=	24.78%	×	0.39	×	—
Mar 31, 2020	—	=	27.86%	×	0.41	×	—
Dec 31, 2019	—	=	28.59%	×	0.44	×	—
Sep 30, 2019	—	=	28.09%	×	0.46	×	—
Jun 30, 2019	—	=	28.32%	×	0.45	×	—
Mar 31, 2019	—	=	28.20%	×	0.45	×	—
Dec 31, 2018	—	=	28.18%	×	0.64	×	—
Sep 30, 2018	—	=	24.56%	×	0.62	×	—
Jun 30, 2018	—	=	25.26%	×	0.66	×	—
Mar 31, 2018	—	=	24.02%	×	0.66	×	—
Dec 31, 2017	—	=	22.75%	×	0.68	×	—
Sep 30, 2017	—	=	24.19%	×	0.72	×	—
Jun 30, 2017	—	=	21.00%	×	0.74	×	—
Mar 31, 2017	—	=	19.58%	×	0.76	×	—
Dec 31, 2016	—	=	19.03%	×	0.79	×	—
Sep 30, 2016	—	=	18.85%	×	0.77	×	—
Jun 30, 2016	739.55%	=	18.84%	×	0.76	×	51.79
Mar 31, 2016	125.36%	=	19.10%	×	0.75	×	8.75
Dec 31, 2015	63.90%	=	17.82%	×	0.67	×	5.35
Sep 30, 2015	—	=	—	×	—	×	3.97
Jun 30, 2015	—	=	—	×	—	×	3.31
Mar 31, 2015	—	=	—	×	—	×	2.82

McDonald’s Corp., decomposition of ROE (quarterly data)


	ROE	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover	×	Financial Leverage
Sep 30, 2020	—	=	0.78	×	0.84	×	39.13%	×	0.38	×	—
Jun 30, 2020	—	=	0.76	×	0.84	×	38.61%	×	0.39	×	—
Mar 31, 2020	—	=	0.76	×	0.87	×	42.04%	×	0.41	×	—
Dec 31, 2019	—	=	0.75	×	0.88	×	43.37%	×	0.44	×	—
Sep 30, 2019	—	=	0.76	×	0.88	×	42.30%	×	0.46	×	—
Jun 30, 2019	—	=	0.76	×	0.88	×	42.30%	×	0.45	×	—
Mar 31, 2019	—	=	0.76	×	0.88	×	42.12%	×	0.45	×	—
Dec 31, 2018	—	=	0.76	×	0.89	×	41.84%	×	0.64	×	—
Sep 30, 2018	—	=	0.66	×	0.89	×	42.03%	×	0.62	×	—
Jun 30, 2018	—	=	0.63	×	0.90	×	44.28%	×	0.66	×	—
Mar 31, 2018	—	=	0.62	×	0.90	×	43.05%	×	0.66	×	—
Dec 31, 2017	—	=	0.61	×	0.90	×	41.61%	×	0.68	×	—
Sep 30, 2017	—	=	0.68	×	0.90	×	39.69%	×	0.72	×	—
Jun 30, 2017	—	=	0.68	×	0.89	×	34.74%	×	0.74	×	—
Mar 31, 2017	—	=	0.67	×	0.89	×	32.72%	×	0.76	×	—
Dec 31, 2016	—	=	0.68	×	0.89	×	31.48%	×	0.79	×	—
Sep 30, 2016	—	=	0.69	×	0.89	×	30.83%	×	0.77	×	—
Jun 30, 2016	739.55%	=	0.69	×	0.90	×	30.25%	×	0.76	×	51.79
Mar 31, 2016	125.36%	=	0.70	×	0.91	×	29.92%	×	0.75	×	8.75
Dec 31, 2015	63.90%	=	0.69	×	0.91	×	28.31%	×	0.67	×	5.35
Sep 30, 2015	—	=	—	×	—	×	—	×	—	×	3.97
Jun 30, 2015	—	=	—	×	—	×	—	×	—	×	3.31
Mar 31, 2015	—	=	—	×	—	×	—	×	—	×	2.82

McDonald’s Corp., decomposition of ROA (quarterly data)


	ROA	=	Net Profit Margin	×	Asset Turnover
Sep 30, 2020	9.72%	=	25.60%	×	0.38
Jun 30, 2020	9.55%	=	24.78%	×	0.39
Mar 31, 2020	11.48%	=	27.86%	×	0.41
Dec 31, 2019	12.68%	=	28.59%	×	0.44
Sep 30, 2019	12.81%	=	28.09%	×	0.46
Jun 30, 2019	12.77%	=	28.32%	×	0.45
Mar 31, 2019	12.65%	=	28.20%	×	0.45
Dec 31, 2018	18.06%	=	28.18%	×	0.64
Sep 30, 2018	15.29%	=	24.56%	×	0.62
Jun 30, 2018	16.67%	=	25.26%	×	0.66
Mar 31, 2018	15.87%	=	24.02%	×	0.66
Dec 31, 2017	15.36%	=	22.75%	×	0.68
Sep 30, 2017	17.47%	=	24.19%	×	0.72
Jun 30, 2017	15.49%	=	21.00%	×	0.74
Mar 31, 2017	14.87%	=	19.58%	×	0.76
Dec 31, 2016	15.11%	=	19.03%	×	0.79
Sep 30, 2016	14.47%	=	18.85%	×	0.77
Jun 30, 2016	14.28%	=	18.84%	×	0.76
Mar 31, 2016	14.33%	=	19.10%	×	0.75
Dec 31, 2015	11.94%	=	17.82%	×	0.67
Sep 30, 2015	—	=	—	×	—
Jun 30, 2015	—	=	—	×	—
Mar 31, 2015	—	=	—	×	—

The primary reason for the increase in return on assets ratio (ROA) over Q3 2020 is the increase in profitability measured by net profit margin ratio.

McDonald’s Corp., decomposition of ROA (quarterly data)


	ROA	=	Tax Burden	×	Interest Burden	×	EBIT Margin	×	Asset Turnover
Sep 30, 2020	9.72%	=	0.78	×	0.84	×	39.13%	×	0.38
Jun 30, 2020	9.55%	=	0.76	×	0.84	×	38.61%	×	0.39
Mar 31, 2020	11.48%	=	0.76	×	0.87	×	42.04%	×	0.41
Dec 31, 2019	12.68%	=	0.75	×	0.88	×	43.37%	×	0.44
Sep 30, 2019	12.81%	=	0.76	×	0.88	×	42.30%	×	0.46
Jun 30, 2019	12.77%	=	0.76	×	0.88	×	42.30%	×	0.45
Mar 31, 2019	12.65%	=	0.76	×	0.88	×	42.12%	×	0.45
Dec 31, 2018	18.06%	=	0.76	×	0.89	×	41.84%	×	0.64
Sep 30, 2018	15.29%	=	0.66	×	0.89	×	42.03%	×	0.62
Jun 30, 2018	16.67%	=	0.63	×	0.90	×	44.28%	×	0.66
Mar 31, 2018	15.87%	=	0.62	×	0.90	×	43.05%	×	0.66
Dec 31, 2017	15.36%	=	0.61	×	0.90	×	41.61%	×	0.68
Sep 30, 2017	17.47%	=	0.68	×	0.90	×	39.69%	×	0.72
Jun 30, 2017	15.49%	=	0.68	×	0.89	×	34.74%	×	0.74
Mar 31, 2017	14.87%	=	0.67	×	0.89	×	32.72%	×	0.76
Dec 31, 2016	15.11%	=	0.68	×	0.89	×	31.48%	×	0.79
Sep 30, 2016	14.47%	=	0.69	×	0.89	×	30.83%	×	0.77
Jun 30, 2016	14.28%	=	0.69	×	0.90	×	30.25%	×	0.76
Mar 31, 2016	14.33%	=	0.70	×	0.91	×	29.92%	×	0.75
Dec 31, 2015	11.94%	=	0.69	×	0.91	×	28.31%	×	0.67
Sep 30, 2015	—	=	—	×	—	×	—	×	—
Jun 30, 2015	—	=	—	×	—	×	—	×	—
Mar 31, 2015	—	=	—	×	—	×	—	×	—

The primary reason for the increase in return on assets ratio (ROA) over Q3 2020 is the increase in effect of taxes measured by tax burden ratio.

McDonald’s Corp., decomposition of net profit margin ratio (quarterly data)


	Net Profit Margin	=	Tax Burden	×	Interest Burden	×	EBIT Margin
Sep 30, 2020	25.60%	=	0.78	×	0.84	×	39.13%
Jun 30, 2020	24.78%	=	0.76	×	0.84	×	38.61%
Mar 31, 2020	27.86%	=	0.76	×	0.87	×	42.04%
Dec 31, 2019	28.59%	=	0.75	×	0.88	×	43.37%
Sep 30, 2019	28.09%	=	0.76	×	0.88	×	42.30%
Jun 30, 2019	28.32%	=	0.76	×	0.88	×	42.30%
Mar 31, 2019	28.20%	=	0.76	×	0.88	×	42.12%
Dec 31, 2018	28.18%	=	0.76	×	0.89	×	41.84%
Sep 30, 2018	24.56%	=	0.66	×	0.89	×	42.03%
Jun 30, 2018	25.26%	=	0.63	×	0.90	×	44.28%
Mar 31, 2018	24.02%	=	0.62	×	0.90	×	43.05%
Dec 31, 2017	22.75%	=	0.61	×	0.90	×	41.61%
Sep 30, 2017	24.19%	=	0.68	×	0.90	×	39.69%
Jun 30, 2017	21.00%	=	0.68	×	0.89	×	34.74%
Mar 31, 2017	19.58%	=	0.67	×	0.89	×	32.72%
Dec 31, 2016	19.03%	=	0.68	×	0.89	×	31.48%
Sep 30, 2016	18.85%	=	0.69	×	0.89	×	30.83%
Jun 30, 2016	18.84%	=	0.69	×	0.90	×	30.25%
Mar 31, 2016	19.10%	=	0.70	×	0.91	×	29.92%
Dec 31, 2015	17.82%	=	0.69	×	0.91	×	28.31%
Sep 30, 2015	—	=	—	×	—	×	—
Jun 30, 2015	—	=	—	×	—	×	—
Mar 31, 2015	—	=	—	×	—	×	—

The primary reason for the increase in net profit margin ratio over Q3 2020 is the increase in effect of taxes measured by tax burden ratio.

McDonald’s Corp. (NYSE:MCD)

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

Two-Component Disaggregation of ROE

Three-Component Disaggregation of ROE

Five-Component Disaggregation of ROE

Two-Component Disaggregation of ROA

Four-Component Disaggregation of ROA

Disaggregation of Net Profit Margin

McDonald’s Corp. (NYSE:MCD)

DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit MarginQuarterly Data

Two-Component Disaggregation of ROE

Three-Component Disaggregation of ROE

Five-Component Disaggregation of ROE

Two-Component Disaggregation of ROA

Four-Component Disaggregation of ROA

Disaggregation of Net Profit Margin

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