DuPont Decomposition
Why does ARROWGREEN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
33.2% = 25.9% × 1.17 × 1.10
Latest: FY2025
Profitability
Net Margin
25.9%
11.3% →25.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.17x
0.90x →1.17x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.24x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 20.7 pp over 3 years. Driven by net margin improving (11.3% → 25.9%), asset turnover improving (0.90x → 1.17x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.3% | 0.90 | 1.24 | 12.5% |
| FY2024 | ₹0Cr | ₹0Cr | 19.7% | 1.02 | 1.15 | 23.1% |
| FY2025 | ₹0Cr | ₹0Cr | 25.9% | 1.17 | 1.10 | 33.2% |
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.