DuPont Decomposition
Why does SIGNPOST earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
15.1% = 7.5% × 0.82 × 2.48
Latest: FY2025
Profitability
Net Margin
7.5%
4.7% →7.5%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
0.80x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.48x
1.99x →2.48x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 7.7 pp over 4 years. Driven by net margin improving (4.7% → 7.5%), leverage rising (1.99x → 2.48x).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 4.7% | 0.80 | 1.99 | 7.4% |
| FY2023 | ₹0Cr | ₹0Cr | 10.5% | 0.89 | 2.51 | 23.5% |
| FY2024 | ₹0Cr | ₹0Cr | 11.4% | 0.81 | 2.51 | 23.3% |
| FY2025 | ₹0Cr | ₹0Cr | 7.5% | 0.82 | 2.48 | 15.1% |
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.