DuPont Decomposition
Why does PRSMJOHNSN earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
4.8% = 1.0% × 1.00 × 4.80
Latest: FY2026
Profitability
Net Margin
1.0%
1.5% →1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.00x
0.95x →1.00x
Revenue per ₹ of assets
Leverage
Equity Multiplier
4.80x
4.88x →4.80x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 2.2 pp over 5 years. High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.5% | 0.95 | 4.88 | 6.9% |
| FY2023 | ₹0Cr | ₹-0Cr | -1.4% | 1.10 | 5.43 | -8.6% |
| FY2024 | ₹0Cr | ₹0Cr | 2.5% | 1.03 | 5.10 | 13.0% |
| FY2025 | ₹0Cr | ₹0Cr | 1.2% | 0.93 | 4.95 | 5.4% |
| FY2026 | ₹0Cr | ₹0Cr | 1.0% | 1.00 | 4.80 | 4.8% |
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.