DuPont Decomposition
Why does ARVSMART earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.7% = 15.6% × 0.26 × 3.30
Latest: FY2025
Profitability
Net Margin
15.6%
11.3% →15.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.26x
0.06x →0.26x
Revenue per ₹ of assets
Leverage
Equity Multiplier
3.30x
3.24x →3.30x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 11.4 pp over 3 years. Driven by net margin improving (11.3% → 15.6%), asset turnover improving (0.06x → 0.26x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 11.3% | 0.06 | 3.24 | 2.3% |
| FY2024 | ₹0Cr | ₹0Cr | 16.6% | 0.06 | 4.25 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 15.6% | 0.26 | 3.30 | 13.7% |
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.