DuPont Decomposition
Why does COMPUSOFT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.1% = 4.4% × 0.18 × 1.36
Latest: FY2025
Profitability
Net Margin
4.4%
43.1% →4.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.18x
0.18x →0.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.36x
1.18x →1.36x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.0 pp over 4 years. Driven by net margin declining (43.1% → 4.4%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 43.1% | 0.18 | 1.18 | 9.1% |
| FY2023 | ₹0Cr | ₹0Cr | 9.2% | 0.32 | 1.21 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 7.5% | 0.35 | 1.43 | 3.7% |
| FY2025 | ₹0Cr | ₹0Cr | 4.4% | 0.18 | 1.36 | 1.1% |
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.