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
7.6% = 9.6% × 0.20 × 4.00
Latest: FY2025
Profitability
Net Margin
9.6%
23.3% →9.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.20x
0.16x →0.20x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.00x
4.28x →4.00x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.5 pp over 3 years. Driven by net margin declining (23.3% → 9.6%), leverage falling (4.28x → 4.00x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 23.3% | 0.16 | 4.28 | 16.2% |
| FY2024 | ₹0Cr | ₹0Cr | 28.0% | 0.18 | 4.39 | 22.0% |
| FY2025 | ₹0Cr | ₹0Cr | 9.6% | 0.20 | 4.00 | 7.6% |
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.