DuPont Decomposition
Why does ROLEXRINGS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
16.2% = 16.4% × 0.83 × 1.20
Latest: FY2025
Profitability
Net Margin
16.4%
18.1% →16.4%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.83x
1.08x →0.83x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.20x
1.36x →1.20x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 10.4 pp over 3 years. Driven by net margin declining (18.1% → 16.4%), asset turnover declining (1.08x → 0.83x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 18.1% | 1.08 | 1.36 | 26.7% |
| FY2024 | ₹0Cr | ₹0Cr | 13.8% | 1.01 | 1.25 | 17.4% |
| FY2025 | ₹0Cr | ₹0Cr | 16.4% | 0.83 | 1.20 | 16.2% |
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.