DuPont Decomposition
Why does ARIES earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
11.6% = 5.5% × 1.07 × 1.98
Latest: FY2025
Profitability
Net Margin
5.5%
-10.4% →5.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.07x
0.18x →1.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.98x
2.14x →1.98x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 15.6 pp over 3 years. Driven by net margin improving (-10.4% → 5.5%), asset turnover improving (0.18x → 1.07x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -10.4% | 0.18 | 2.14 | -4.0% |
| FY2024 | ₹0Cr | ₹-0Cr | -5.9% | 0.20 | 1.99 | -2.4% |
| FY2025 | ₹0Cr | ₹0Cr | 5.5% | 1.07 | 1.98 | 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.