DuPont Decomposition
Why does PARKHOSPS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
12.8% = 15.4% × 0.60 × 1.39
Latest: FY2026
Profitability
Net Margin
15.4%
17.5% →15.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.60x
0.79x →0.60x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.39x
2.32x →1.39x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 19.2 pp over 4 years. Driven by net margin declining (17.5% → 15.4%), asset turnover declining (0.79x → 0.60x), leverage falling (2.32x → 1.39x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 17.5% | 0.79 | 2.32 | 32.0% |
| FY2024 | ₹0Cr | ₹0Cr | 12.5% | 0.64 | 2.17 | 17.4% |
| FY2025 | ₹0Cr | ₹0Cr | 14.5% | 0.65 | 1.99 | 18.9% |
| FY2026 | ₹0Cr | ₹0Cr | 15.4% | 0.60 | 1.39 | 12.8% |
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.