Stock Analysis on Net
Stock Analysis on Net

ServiceNow Inc. (NYSE:NOW)

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

Microsoft Excel

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

Two-Component Disaggregation of ROE

ServiceNow Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = ROA × Financial Leverage
Dec 31, 2023 22.69% = 9.96% × 2.28
Sep 30, 2023 22.08% = 10.51% × 2.10
Jun 30, 2023 20.56% = 9.54% × 2.15
Mar 31, 2023 7.14% = 2.94% × 2.43
Dec 31, 2022 6.46% = 2.44% × 2.64
Sep 30, 2022 4.44% = 1.81% × 2.46
Jun 30, 2022 4.39% = 1.66% × 2.65
Mar 31, 2022 5.58% = 2.03% × 2.75
Dec 31, 2021 6.22% = 2.13% × 2.92
Sep 30, 2021 6.24% = 2.33% × 2.68
Jun 30, 2021 5.21% = 1.86% × 2.81
Mar 31, 2021 5.01% = 1.73% × 2.90
Dec 31, 2020 4.18% = 1.36% × 3.07
Sep 30, 2020 26.20% = 9.09% × 2.88
Jun 30, 2020 29.38% = 11.17% × 2.63
Mar 31, 2020 29.85% = 10.92% × 2.73
Dec 31, 2019 29.45% = 10.41% × 2.83
Sep 30, 2019 — = — × 3.33
Jun 30, 2019 — = — × 3.65
Mar 31, 2019 — = — × 3.68

Based on: 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2023 is the increase in financial leverage ratio.

Three-Component Disaggregation of ROE

ServiceNow Inc., decomposition of ROE (quarterly data)

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2023 22.69% = 19.30% × 0.52 × 2.28
Sep 30, 2023 22.08% = 18.72% × 0.56 × 2.10
Jun 30, 2023 20.56% = 17.76% × 0.54 × 2.15
Mar 31, 2023 7.14% = 5.25% × 0.56 × 2.43
Dec 31, 2022 6.46% = 4.49% × 0.54 × 2.64
Sep 30, 2022 4.44% = 2.90% × 0.62 × 2.46
Jun 30, 2022 4.39% = 2.79% × 0.59 × 2.65
Mar 31, 2022 5.58% = 3.56% × 0.57 × 2.75
Dec 31, 2021 6.22% = 3.90% × 0.55 × 2.92
Sep 30, 2021 6.24% = 3.99% × 0.58 × 2.68
Jun 30, 2021 5.21% = 3.30% × 0.56 × 2.81
Mar 31, 2021 5.01% = 3.15% × 0.55 × 2.90
Dec 31, 2020 4.18% = 2.62% × 0.52 × 3.07
Sep 30, 2020 26.20% = 16.60% × 0.55 × 2.88
Jun 30, 2020 29.38% = 18.42% × 0.61 × 2.63
Mar 31, 2020 29.85% = 18.20% × 0.60 × 2.73
Dec 31, 2019 29.45% = 18.11% × 0.57 × 2.83
Sep 30, 2019 — = — × — × 3.33
Jun 30, 2019 — = — × — × 3.65
Mar 31, 2019 — = — × — × 3.68

Based on: 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the increase in return on equity ratio (ROE) over Q4 2023 is the increase in financial leverage ratio.

Two-Component Disaggregation of ROA

ServiceNow Inc., decomposition of ROA (quarterly data)

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2023 9.96% = 19.30% × 0.52
Sep 30, 2023 10.51% = 18.72% × 0.56
Jun 30, 2023 9.54% = 17.76% × 0.54
Mar 31, 2023 2.94% = 5.25% × 0.56
Dec 31, 2022 2.44% = 4.49% × 0.54
Sep 30, 2022 1.81% = 2.90% × 0.62
Jun 30, 2022 1.66% = 2.79% × 0.59
Mar 31, 2022 2.03% = 3.56% × 0.57
Dec 31, 2021 2.13% = 3.90% × 0.55
Sep 30, 2021 2.33% = 3.99% × 0.58
Jun 30, 2021 1.86% = 3.30% × 0.56
Mar 31, 2021 1.73% = 3.15% × 0.55
Dec 31, 2020 1.36% = 2.62% × 0.52
Sep 30, 2020 9.09% = 16.60% × 0.55
Jun 30, 2020 11.17% = 18.42% × 0.61
Mar 31, 2020 10.92% = 18.20% × 0.60
Dec 31, 2019 10.41% = 18.11% × 0.57
Sep 30, 2019 — = — × —
Jun 30, 2019 — = — × —
Mar 31, 2019 — = — × —

Based on: 10-K (reporting date: 2023-12-31), 10-Q (reporting date: 2023-09-30), 10-Q (reporting date: 2023-06-30), 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31), 10-K (reporting date: 2019-12-31), 10-Q (reporting date: 2019-09-30), 10-Q (reporting date: 2019-06-30), 10-Q (reporting date: 2019-03-31).

The primary reason for the decrease in return on assets ratio (ROA) over Q4 2023 is the decrease in asset turnover ratio.