DuPont Decomposition
Why does CREDITACC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.9% = 13.2% × 0.18 × 4.07
Latest: FY2026
Profitability
Net Margin
13.2%
13.9% →13.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.18x
0.15x →0.18x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.07x
4.20x →4.07x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 1.4 pp over 5 years. High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.9% | 0.15 | 4.20 | 8.5% |
| FY2023 | ₹0Cr | ₹0Cr | 25.1% | 0.15 | 4.28 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 29.5% | 0.17 | 4.39 | 22.0% |
| FY2025 | ₹0Cr | ₹0Cr | 9.4% | 0.20 | 4.00 | 7.6% |
| FY2026 | ₹0Cr | ₹0Cr | 13.2% | 0.18 | 4.07 | 9.9% |
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.