DuPont Decomposition
Why does ASAHISONG earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
7.8% = 3.5% × 0.95 × 2.31
Latest: FY2025
Profitability
Net Margin
3.5%
4.7% →3.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.95x
0.87x →0.95x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.31x
1.94x →2.31x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~8%. Driven by net margin declining (4.7% → 3.5%), leverage rising (1.94x → 2.31x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.7% | 0.87 | 1.94 | 8.0% |
| FY2023 | ₹0Cr | ₹-0Cr | -2.3% | 0.92 | 2.50 | -5.3% |
| FY2024 | ₹0Cr | ₹0Cr | 4.7% | 0.74 | 2.44 | 8.5% |
| FY2025 | ₹0Cr | ₹0Cr | 3.5% | 0.95 | 2.31 | 7.8% |
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.