DuPont Decomposition
Why does ACMESOLAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
5.6% = 17.9% × 0.08 × 4.08
Latest: FY2025
Profitability
Net Margin
17.9%
4.2% →17.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.14x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.08x
5.42x →4.08x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.5 pp over 4 years. Driven by net margin improving (4.2% → 17.9%), leverage falling (5.42x → 4.08x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.2% | 0.14 | 5.42 | 3.1% |
| FY2023 | ₹0Cr | ₹-0Cr | -0.2% | 0.11 | 6.31 | -0.2% |
| FY2024 | ₹0Cr | ₹0Cr | 52.9% | 0.10 | 5.17 | 26.9% |
| FY2025 | ₹0Cr | ₹0Cr | 17.9% | 0.08 | 4.08 | 5.6% |
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.