DuPont Decomposition
Why does LINCOLN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.3% = 13.4% × 0.77 × 1.19
Latest: FY2025
Profitability
Net Margin
13.4%
14.8% →13.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.77x
0.88x →0.77x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.19x
1.23x →1.19x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 3.8 pp over 4 years. Driven by net margin declining (14.8% → 13.4%), asset turnover declining (0.88x → 0.77x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 14.8% | 0.88 | 1.23 | 16.0% |
| FY2023 | ₹0Cr | ₹0Cr | 14.4% | 0.86 | 1.17 | 14.5% |
| FY2024 | ₹0Cr | ₹0Cr | 16.3% | 0.82 | 1.18 | 15.7% |
| FY2025 | ₹0Cr | ₹0Cr | 13.4% | 0.77 | 1.19 | 12.3% |
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.