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
25.3% = 12.3% × 1.23 × 1.68
Latest: FY2025
Profitability
Net Margin
12.3%
7.7% →12.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.23x
0.38x →1.23x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.68x
1.74x →1.68x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.2 pp over 3 years. Driven by net margin improving (7.7% → 12.3%), asset turnover improving (0.38x → 1.23x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 7.7% | 0.38 | 1.74 | 5.1% |
| FY2024 | ₹0Cr | ₹0Cr | 11.8% | 0.39 | 1.76 | 8.0% |
| FY2025 | ₹0Cr | ₹0Cr | 12.3% | 1.23 | 1.68 | 25.3% |
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.