DuPont Decomposition
Why does RICOAUTO earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
2.9% = 1.0% × 1.08 × 2.73
Latest: FY2025
Profitability
Net Margin
1.0%
4.3% →1.0%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
1.08x
0.31x →1.08x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.73x
2.81x →2.73x
Assets funded by equity vs debt
Trend Analysis
ROE stable at ~3%. Driven by net margin declining (4.3% → 1.0%), asset turnover improving (0.31x → 1.08x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 4.3% | 0.31 | 2.81 | 3.8% |
| FY2024 | ₹0Cr | ₹0Cr | 3.0% | 0.29 | 2.63 | 2.3% |
| FY2025 | ₹0Cr | ₹0Cr | 1.0% | 1.08 | 2.73 | 2.9% |
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.