Stock Analysis on Net

Target Corp. (NYSE:TGT)

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

Microsoft Excel

Two-Component Disaggregation of ROE

Target Corp., decomposition of ROE

Microsoft Excel
ROE = ROA × Financial Leverage
Jan 29, 2022 54.15% = 12.91% × 4.20
Jan 30, 2021 30.25% = 8.52% × 3.55
Feb 1, 2020 27.73% = 7.67% × 3.62
Feb 2, 2019 26.00% = 7.11% × 3.65
Feb 3, 2018 25.06% = 7.52% × 3.33
Jan 28, 2017 24.99% = 7.31% × 3.42

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by return on assets ratio (ROA).


Three-Component Disaggregation of ROE

Target Corp., decomposition of ROE

Microsoft Excel
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Jan 29, 2022 54.15% = 6.64% × 1.94 × 4.20
Jan 30, 2021 30.25% = 4.73% × 1.80 × 3.55
Feb 1, 2020 27.73% = 4.25% × 1.80 × 3.62
Feb 2, 2019 26.00% = 3.95% × 1.80 × 3.65
Feb 3, 2018 25.06% = 4.08% × 1.84 × 3.33
Jan 28, 2017 24.99% = 3.94% × 1.86 × 3.42

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in profitability measured by net profit margin ratio.


Five-Component Disaggregation of ROE

Target Corp., decomposition of ROE

Microsoft Excel
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Jan 29, 2022 54.15% = 0.78 × 0.95 × 8.92% × 1.94 × 4.20
Jan 30, 2021 30.25% = 0.79 × 0.85 × 7.06% × 1.80 × 3.55
Feb 1, 2020 27.73% = 0.78 × 0.90 × 6.07% × 1.80 × 3.62
Feb 2, 2019 26.00% = 0.80 × 0.89 × 5.57% × 1.80 × 3.65
Feb 3, 2018 25.06% = 0.80 × 0.85 × 6.01% × 1.84 × 3.33
Jan 28, 2017 24.99% = 0.68 × 0.80 × 7.25% × 1.86 × 3.42

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in return on equity ratio (ROE) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.


Two-Component Disaggregation of ROA

Target Corp., decomposition of ROA

Microsoft Excel
ROA = Net Profit Margin × Asset Turnover
Jan 29, 2022 12.91% = 6.64% × 1.94
Jan 30, 2021 8.52% = 4.73% × 1.80
Feb 1, 2020 7.67% = 4.25% × 1.80
Feb 2, 2019 7.11% = 3.95% × 1.80
Feb 3, 2018 7.52% = 4.08% × 1.84
Jan 28, 2017 7.31% = 3.94% × 1.86

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in profitability measured by net profit margin ratio.


Four-Component Disaggregation of ROA

Target Corp., decomposition of ROA

Microsoft Excel
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Jan 29, 2022 12.91% = 0.78 × 0.95 × 8.92% × 1.94
Jan 30, 2021 8.52% = 0.79 × 0.85 × 7.06% × 1.80
Feb 1, 2020 7.67% = 0.78 × 0.90 × 6.07% × 1.80
Feb 2, 2019 7.11% = 0.80 × 0.89 × 5.57% × 1.80
Feb 3, 2018 7.52% = 0.80 × 0.85 × 6.01% × 1.84
Jan 28, 2017 7.31% = 0.68 × 0.80 × 7.25% × 1.86

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in return on assets ratio (ROA) over 2022 year is the increase in operating profitability measured by EBIT margin ratio.


Disaggregation of Net Profit Margin

Target Corp., decomposition of net profit margin ratio

Microsoft Excel
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Jan 29, 2022 6.64% = 0.78 × 0.95 × 8.92%
Jan 30, 2021 4.73% = 0.79 × 0.85 × 7.06%
Feb 1, 2020 4.25% = 0.78 × 0.90 × 6.07%
Feb 2, 2019 3.95% = 0.80 × 0.89 × 5.57%
Feb 3, 2018 4.08% = 0.80 × 0.85 × 6.01%
Jan 28, 2017 3.94% = 0.68 × 0.80 × 7.25%

Based on: 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), 10-K (reporting date: 2017-01-28).

The primary reason for the increase in net profit margin ratio over 2022 year is the increase in operating profitability measured by EBIT margin ratio.