DuPont Decomposition
Why does RAMRAT earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.4% = 1.9% × 2.82 × 2.67
Latest: FY2025
Profitability
Net Margin
1.9%
2.3% →1.9%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
2.82x
3.19x →2.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.67x
2.54x →2.67x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 4.1 pp over 4 years. Driven by asset turnover declining (3.19x → 2.82x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 2.3% | 3.19 | 2.54 | 18.5% |
| FY2023 | ₹0Cr | ₹0Cr | 1.7% | 3.67 | 2.36 | 14.8% |
| FY2024 | ₹0Cr | ₹0Cr | 1.9% | 3.12 | 2.32 | 13.7% |
| FY2025 | ₹0Cr | ₹0Cr | 1.9% | 2.82 | 2.67 | 14.4% |
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.