DuPont Decomposition
Why does RAMANEWS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-16.4% = -32.5% × 0.08 × 6.51
Latest: FY2024
Profitability
Net Margin
-32.5%
-218.9% →-32.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.08x
0.07x →0.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
6.51x
4.45x →6.51x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 55.1 pp over 2 years. Driven by net margin improving (-218.9% → -32.5%), leverage rising (4.45x → 6.51x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 2 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹-0Cr | -218.9% | 0.07 | 4.45 | -71.5% |
| FY2024 | ₹0Cr | ₹-0Cr | -32.5% | 0.08 | 6.51 | -16.4% |
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.