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

Union Pacific Corp. (NYSE:UNP)

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

Union Pacific Corp., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = ROA × Financial Leverage
Dec 31, 2020 31.54% = 8.57% × 3.68
Dec 31, 2019 32.65% = 9.60% × 3.40
Dec 31, 2018 29.21% = 10.09% × 2.90
Dec 31, 2017 43.10% = 18.53% × 2.33
Dec 31, 2016 21.24% = 7.60% × 2.80

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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

Union Pacific Corp., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Net Profit Margin × Asset Turnover × Financial Leverage
Dec 31, 2020 31.54% = 27.38% × 0.31 × 3.68
Dec 31, 2019 32.65% = 27.27% × 0.35 × 3.40
Dec 31, 2018 29.21% = 26.13% × 0.39 × 2.90
Dec 31, 2017 43.10% = 50.43% × 0.37 × 2.33
Dec 31, 2016 21.24% = 21.23% × 0.36 × 2.80

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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

Union Pacific Corp., decomposition of ROE

Microsoft Excel LibreOffice Calc
ROE = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover × Financial Leverage
Dec 31, 2020 31.54% = 0.77 × 0.86 × 41.58% × 0.31 × 3.68
Dec 31, 2019 32.65% = 0.76 × 0.88 × 40.52% × 0.35 × 3.40
Dec 31, 2018 29.21% = 0.77 × 0.90 × 37.71% × 0.39 × 2.90
Dec 31, 2017 43.10% = 1.40 × 0.91 × 39.32% × 0.37 × 2.33
Dec 31, 2016 21.24% = 0.63 × 0.91 × 37.43% × 0.36 × 2.80

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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

Union Pacific Corp., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Net Profit Margin × Asset Turnover
Dec 31, 2020 8.57% = 27.38% × 0.31
Dec 31, 2019 9.60% = 27.27% × 0.35
Dec 31, 2018 10.09% = 26.13% × 0.39
Dec 31, 2017 18.53% = 50.43% × 0.37
Dec 31, 2016 7.60% = 21.23% × 0.36

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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

Union Pacific Corp., decomposition of ROA

Microsoft Excel LibreOffice Calc
ROA = Tax Burden × Interest Burden × EBIT Margin × Asset Turnover
Dec 31, 2020 8.57% = 0.77 × 0.86 × 41.58% × 0.31
Dec 31, 2019 9.60% = 0.76 × 0.88 × 40.52% × 0.35
Dec 31, 2018 10.09% = 0.77 × 0.90 × 37.71% × 0.39
Dec 31, 2017 18.53% = 1.40 × 0.91 × 39.32% × 0.37
Dec 31, 2016 7.60% = 0.63 × 0.91 × 37.43% × 0.36

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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

Union Pacific Corp., decomposition of net profit margin ratio

Microsoft Excel LibreOffice Calc
Net Profit Margin = Tax Burden × Interest Burden × EBIT Margin
Dec 31, 2020 27.38% = 0.77 × 0.86 × 41.58%
Dec 31, 2019 27.27% = 0.76 × 0.88 × 40.52%
Dec 31, 2018 26.13% = 0.77 × 0.90 × 37.71%
Dec 31, 2017 50.43% = 1.40 × 0.91 × 39.32%
Dec 31, 2016 21.23% = 0.63 × 0.91 × 37.43%

Based on: 10-K (filing date: 2021-02-05), 10-K (filing date: 2020-02-07), 10-K (filing date: 2019-02-08), 10-K (filing date: 2018-02-09), 10-K (filing date: 2017-02-03).

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