DuPont Decomposition
Why does ACE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
20.6% = 12.7% × 1.01 × 1.62
Latest: FY2026
Profitability
Net Margin
12.7%
6.4% →12.7%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.27x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
1.70x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 6.7 pp over 5 years. Driven by net margin improving (6.4% → 12.7%), asset turnover declining (1.27x → 1.01x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 6.4% | 1.27 | 1.70 | 13.9% |
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 1.35 | 1.74 | 18.7% |
| FY2024 | ₹0Cr | ₹0Cr | 11.3% | 1.34 | 1.76 | 26.7% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 1.23 | 1.68 | 25.3% |
| FY2026 | ₹0Cr | ₹0Cr | 12.7% | 1.01 | 1.62 | 20.6% |
How to read DuPont
- • Rising ROE from margin = pricing power, operational improvement (good)
- • Rising ROE from turnover = better asset utilization (good)
- • Rising ROE from leverage = more debt, amplified risk (caution)
- • Falling ROE across all three = structural deterioration (red flag)
DuPont decomposition from audited annual financials. Factual analysis, not investment advice.