DuPont Decomposition
Why does RADIANTCMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
17.0% = 10.9% × 1.01 × 1.55
Latest: FY2025
Profitability
Net Margin
10.9%
13.4% →10.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.01x
1.50x →1.01x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.55x
1.36x →1.55x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.4 pp over 4 years. Driven by net margin declining (13.4% → 10.9%), asset turnover declining (1.50x → 1.01x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 13.4% | 1.50 | 1.36 | 27.3% |
| FY2023 | ₹0Cr | ₹0Cr | 17.7% | 1.27 | 1.21 | 27.3% |
| FY2024 | ₹0Cr | ₹0Cr | 11.6% | 1.23 | 1.24 | 17.7% |
| FY2025 | ₹0Cr | ₹0Cr | 10.9% | 1.01 | 1.55 | 17.0% |
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.