Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

TJX Cos. Inc. (NYSE:TJX)

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

TJX Cos. Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Feb 1, 2020 55.01% = 13.55% × 4.06
Feb 2, 2019 60.61% = 21.36% × 2.84
Feb 3, 2018 50.66% = 18.55% × 2.73
Jan 28, 2017 50.95% = 17.84% × 2.86
Jan 30, 2016 52.88% = 19.81% × 2.67
Jan 31, 2015 51.95% = 19.91% × 2.61

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2020 year is the decrease in profitability measured by return on assets ratio (ROA).

Three-Component Disaggregation of ROE

TJX Cos. Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Feb 1, 2020 55.01% = 7.84% × 1.73 × 4.06
Feb 2, 2019 60.61% = 7.85% × 2.72 × 2.84
Feb 3, 2018 50.66% = 7.27% × 2.55 × 2.73
Jan 28, 2017 50.95% = 6.93% × 2.58 × 2.86
Jan 30, 2016 52.88% = 7.36% × 2.69 × 2.67
Jan 31, 2015 51.95% = 7.62% × 2.61 × 2.61

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2020 year is the decrease in efficiency measured by asset turnover ratio.

Five-Component Disaggregation of ROE

TJX Cos. Inc., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Feb 1, 2020 55.01% = 0.74 × 0.99 × 10.70% × 1.73 × 4.06
Feb 2, 2019 60.61% = 0.73 × 0.98 × 10.87% × 2.72 × 2.84
Feb 3, 2018 50.66% = 0.68 × 0.98 × 10.93% × 2.55 × 2.73
Jan 28, 2017 50.95% = 0.62 × 0.98 × 11.41% × 2.58 × 2.86
Jan 30, 2016 52.88% = 0.62 × 0.98 × 12.02% × 2.69 × 2.67
Jan 31, 2015 51.95% = 0.62 × 0.98 × 12.40% × 2.61 × 2.61

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in return on equity ratio (ROE) over 2020 year is the decrease in efficiency measured by asset turnover ratio.

Two-Component Disaggregation of ROA

TJX Cos. Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Feb 1, 2020 13.55% = 7.84% × 1.73
Feb 2, 2019 21.36% = 7.85% × 2.72
Feb 3, 2018 18.55% = 7.27% × 2.55
Jan 28, 2017 17.84% = 6.93% × 2.58
Jan 30, 2016 19.81% = 7.36% × 2.69
Jan 31, 2015 19.91% = 7.62% × 2.61

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2020 year is the decrease in asset turnover ratio.

Four-Component Disaggregation of ROA

TJX Cos. Inc., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Feb 1, 2020 13.55% = 0.74 × 0.99 × 10.70% × 1.73
Feb 2, 2019 21.36% = 0.73 × 0.98 × 10.87% × 2.72
Feb 3, 2018 18.55% = 0.68 × 0.98 × 10.93% × 2.55
Jan 28, 2017 17.84% = 0.62 × 0.98 × 11.41% × 2.58
Jan 30, 2016 19.81% = 0.62 × 0.98 × 12.02% × 2.69
Jan 31, 2015 19.91% = 0.62 × 0.98 × 12.40% × 2.61

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in return on assets ratio (ROA) over 2020 year is the decrease in efficiency measured by asset turnover ratio.

Disaggregation of Net Profit Margin

TJX Cos. Inc., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Feb 1, 2020 7.84% = 0.74 × 0.99 × 10.70%
Feb 2, 2019 7.85% = 0.73 × 0.98 × 10.87%
Feb 3, 2018 7.27% = 0.68 × 0.98 × 10.93%
Jan 28, 2017 6.93% = 0.62 × 0.98 × 11.41%
Jan 30, 2016 7.36% = 0.62 × 0.98 × 12.02%
Jan 31, 2015 7.62% = 0.62 × 0.98 × 12.40%

Based on: 10-K (filing date: 2020-03-27), 10-K (filing date: 2019-04-03), 10-K (filing date: 2018-04-04), 10-K (filing date: 2017-03-28), 10-K (filing date: 2016-03-29), 10-K (filing date: 2015-03-31).

The primary reason for the decrease in net profit margin ratio over 2020 year is the decrease in operating profitability measured by EBIT margin ratio.