DuPont Decomposition
Why does FMGOETZE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.0% = 9.2% × 1.00 × 1.31
Latest: FY2025
Profitability
Net Margin
9.2%
8.3% →9.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.28x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.31x
1.52x →1.31x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.5 pp over 3 years. Driven by asset turnover improving (0.28x → 1.00x), leverage falling (1.52x → 1.31x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.3% | 0.28 | 1.52 | 3.5% |
| FY2024 | ₹0Cr | ₹0Cr | 10.1% | 0.27 | 1.43 | 3.9% |
| FY2025 | ₹0Cr | ₹0Cr | 9.2% | 1.00 | 1.31 | 12.0% |
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.