DuPont Decomposition
Why does COSMOFIRST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 4.8% × 0.68 × 2.81
Latest: FY2025
Profitability
Net Margin
4.8%
13.2% →4.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.68x
1.09x →0.68x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.81x
2.32x →2.81x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 24.2 pp over 4 years. Driven by net margin declining (13.2% → 4.8%), asset turnover declining (1.09x → 0.68x), leverage rising (2.32x → 2.81x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.2% | 1.09 | 2.32 | 33.3% |
| FY2023 | ₹0Cr | ₹0Cr | 8.1% | 0.97 | 2.41 | 18.8% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 0.72 | 2.62 | 4.6% |
| FY2025 | ₹0Cr | ₹0Cr | 4.8% | 0.68 | 2.81 | 9.1% |
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.