DuPont Decomposition
Why does AFFORDABLE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-11.6% = -7.2% × 0.70 × 2.31
Latest: FY2025
Profitability
Net Margin
-7.2%
2.9% →-7.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.70x
0.67x →0.70x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.31x
2.27x →2.31x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 16.0 pp over 4 years. Driven by net margin declining (2.9% → -7.2%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.9% | 0.67 | 2.27 | 4.5% |
| FY2023 | ₹0Cr | ₹0Cr | 1.9% | 0.68 | 2.79 | 3.6% |
| FY2024 | ₹0Cr | ₹0Cr | 4.0% | 0.68 | 2.11 | 5.7% |
| FY2025 | ₹0Cr | ₹-0Cr | -7.2% | 0.70 | 2.31 | -11.6% |
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.