Stock Analysis on Net
Stock Analysis on Net

RH (NYSE:RH)

This company has been moved to the archive! The financial data has not been updated since May 26, 2023.

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

Microsoft Excel

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

Two-Component Disaggregation of ROE

RH, decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jan 28, 2023 67.37% = 9.96% × 6.77
Jan 29, 2022 58.84% = 12.43% × 4.73
Jan 30, 2021 60.81% = 9.38% × 6.48
Feb 1, 2020 1,181.57% = 9.01% × 131.13
Feb 2, 2019 — = 8.34% × —
Feb 3, 2018 — = 0.13% × —

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in financial leverage ratio.

Three-Component Disaggregation of ROE

RH, decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jan 28, 2023 67.37% = 14.72% × 0.68 × 6.77
Jan 29, 2022 58.84% = 18.32% × 0.68 × 4.73
Jan 30, 2021 60.81% = 9.54% × 0.98 × 6.48
Feb 1, 2020 1,181.57% = 8.32% × 1.08 × 131.13
Feb 2, 2019 — = 6.01% × 1.39 × —
Feb 3, 2018 — = 0.09% × 1.41 × —

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in financial leverage ratio.

Five-Component Disaggregation of ROE

RH, decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jan 28, 2023 67.37% = 1.21 × 0.74 × 16.40% × 0.68 × 6.77
Jan 29, 2022 58.84% = 0.84 × 0.92 × 23.65% × 0.68 × 4.73
Jan 30, 2021 60.81% = 0.72 × 0.84 × 15.69% × 0.98 × 6.48
Feb 1, 2020 1,181.57% = 0.82 × 0.75 × 13.51% × 1.08 × 131.13
Feb 2, 2019 — = 0.83 × 0.70 × 10.26% × 1.39 × —
Feb 3, 2018 — = 0.07 × 0.32 × 3.82% × 1.41 × —

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the increase in return on equity ratio (ROE) over 2023 year is the increase in effect of taxes measured by tax burden ratio.

Two-Component Disaggregation of ROA

RH, decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jan 28, 2023 9.96% = 14.72% × 0.68
Jan 29, 2022 12.43% = 18.32% × 0.68
Jan 30, 2021 9.38% = 9.54% × 0.98
Feb 1, 2020 9.01% = 8.32% × 1.08
Feb 2, 2019 8.34% = 6.01% × 1.39
Feb 3, 2018 0.13% = 0.09% × 1.41

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in profitability measured by net profit margin ratio.

Four-Component Disaggregation of ROA

RH, decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jan 28, 2023 9.96% = 1.21 × 0.74 × 16.40% × 0.68
Jan 29, 2022 12.43% = 0.84 × 0.92 × 23.65% × 0.68
Jan 30, 2021 9.38% = 0.72 × 0.84 × 15.69% × 0.98
Feb 1, 2020 9.01% = 0.82 × 0.75 × 13.51% × 1.08
Feb 2, 2019 8.34% = 0.83 × 0.70 × 10.26% × 1.39
Feb 3, 2018 0.13% = 0.07 × 0.32 × 3.82% × 1.41

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the decrease in return on assets ratio (ROA) over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.

Disaggregation of Net Profit Margin

RH, decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jan 28, 2023 14.72% = 1.21 × 0.74 × 16.40%
Jan 29, 2022 18.32% = 0.84 × 0.92 × 23.65%
Jan 30, 2021 9.54% = 0.72 × 0.84 × 15.69%
Feb 1, 2020 8.32% = 0.82 × 0.75 × 13.51%
Feb 2, 2019 6.01% = 0.83 × 0.70 × 10.26%
Feb 3, 2018 0.09% = 0.07 × 0.32 × 3.82%

Based on: 10-K (reporting date: 2023-01-28), 10-K (reporting date: 2022-01-29), 10-K (reporting date: 2021-01-30), 10-K (reporting date: 2020-02-01), 10-K (reporting date: 2019-02-02), 10-K (reporting date: 2018-02-03).

The primary reason for the decrease in net profit margin ratio over 2023 year is the decrease in operating profitability measured by EBIT margin ratio.