DuPont Decomposition
Why does LIBERTSHOE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
6.1% = 2.0% × 1.36 × 2.23
Latest: FY2025
Profitability
Net Margin
2.0%
2.0% →2.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.36x
1.39x →1.36x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.23x
2.38x →2.23x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~6%.
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 2.0% | 1.39 | 2.38 | 6.5% |
| FY2024 | ₹0Cr | ₹0Cr | 1.8% | 1.37 | 2.22 | 5.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.0% | 1.36 | 2.23 | 6.1% |
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.