DuPont Decomposition
Why does RKFORGE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
13.7% = 11.4% × 0.55 × 2.16
Latest: FY2025
Profitability
Net Margin
11.4%
8.0% →11.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.55x
0.23x →0.55x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.16x
2.74x →2.16x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 8.6 pp over 3 years. Driven by net margin improving (8.0% → 11.4%), asset turnover improving (0.23x → 0.55x), leverage falling (2.74x → 2.16x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 8.0% | 0.23 | 2.74 | 5.0% |
| FY2024 | ₹0Cr | ₹0Cr | 9.2% | 0.19 | 1.98 | 3.5% |
| FY2025 | ₹0Cr | ₹0Cr | 11.4% | 0.55 | 2.16 | 13.7% |
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.