DuPont Decomposition
Why does FORCEMOT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
26.4% = 10.0% × 1.56 × 1.69
Latest: FY2025
Profitability
Net Margin
10.0%
-2.8% →10.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.56x
0.88x →1.56x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.69x
2.09x →1.69x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 31.6 pp over 4 years. Driven by net margin improving (-2.8% → 10.0%), asset turnover improving (0.88x → 1.56x), leverage falling (2.09x → 1.69x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -2.8% | 0.88 | 2.09 | -5.2% |
| FY2023 | ₹0Cr | ₹0Cr | 2.7% | 1.24 | 2.14 | 7.1% |
| FY2024 | ₹0Cr | ₹0Cr | 7.0% | 0.46 | 1.96 | 6.2% |
| FY2025 | ₹0Cr | ₹0Cr | 10.0% | 1.56 | 1.69 | 26.4% |
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.