DuPont Decomposition
Why does JMFINANCIL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.0% = 30.2% × 0.11 × 2.40
Latest: FY2025
Profitability
Net Margin
30.2%
3.8% →30.2%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.11x
0.03x →0.11x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.40x
2.61x →2.40x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.7 pp over 3 years. Driven by net margin improving (3.8% → 30.2%), leverage falling (2.61x → 2.40x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 3.8% | 0.03 | 2.61 | 0.3% |
| FY2024 | ₹0Cr | ₹-0Cr | -53.5% | 0.04 | 2.69 | -6.1% |
| FY2025 | ₹0Cr | ₹0Cr | 30.2% | 0.11 | 2.40 | 8.0% |
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.