DuPont Decomposition
Why does SFL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
3.1% = 2.8% × 0.63 × 1.77
Latest: FY2025
Profitability
Net Margin
2.8%
6.9% →2.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.63x
1.06x →0.63x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.77x
1.69x →1.77x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 9.3 pp over 3 years. Driven by net margin declining (6.9% → 2.8%), asset turnover declining (1.06x → 0.63x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 6.9% | 1.06 | 1.69 | 12.4% |
| FY2024 | ₹0Cr | ₹0Cr | 6.1% | 0.56 | 1.83 | 6.3% |
| FY2025 | ₹0Cr | ₹0Cr | 2.8% | 0.63 | 1.77 | 3.1% |
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.