DuPont Decomposition
Why does GOODYEAR earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
9.1% = 2.1% × 2.07 × 2.06
Latest: FY2025
Profitability
Net Margin
2.1%
4.2% →2.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.07x
1.78x →2.07x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.06x
1.91x →2.06x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.2 pp over 4 years. Driven by net margin declining (4.2% → 2.1%), asset turnover improving (1.78x → 2.07x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.2% | 1.78 | 1.91 | 14.4% |
| FY2023 | ₹0Cr | ₹0Cr | 4.2% | 2.31 | 2.08 | 20.3% |
| FY2024 | ₹0Cr | ₹0Cr | 3.8% | 2.13 | 2.03 | 16.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.1% | 2.07 | 2.06 | 9.1% |
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.