DuPont Decomposition
Why does GOCOLORS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.4% = 11.0% × 0.66 × 1.84
Latest: FY2025
Profitability
Net Margin
11.0%
8.9% →11.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.66x
0.53x →0.66x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.84x
1.71x →1.84x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 5.3 pp over 4 years. Driven by net margin improving (8.9% → 11.0%), asset turnover improving (0.53x → 0.66x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 8.9% | 0.53 | 1.71 | 8.1% |
| FY2023 | ₹0Cr | ₹0Cr | 12.5% | 0.72 | 1.78 | 15.9% |
| FY2024 | ₹0Cr | ₹0Cr | 10.9% | 0.67 | 1.89 | 13.7% |
| FY2025 | ₹0Cr | ₹0Cr | 11.0% | 0.66 | 1.84 | 13.4% |
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.