DuPont Decomposition
Why does SMARTWORKS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-58.6% = -4.6% × 0.30 × 43.11
Latest: FY2025
Profitability
Net Margin
-4.6%
-19.4% →-4.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.30x
0.13x →0.30x
Revenue per ₹ of assets
Leverage
Equity Multiplier
43.11x
25.06x →43.11x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 2.7 pp over 4 years. Driven by net margin improving (-19.4% → -4.6%), asset turnover improving (0.13x → 0.30x), leverage rising (25.06x → 43.11x). High financial leverage (equity multiplier > 4x) amplifies returns but also risk.
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹-0Cr | -19.4% | 0.13 | 25.06 | -61.3% |
| FY2023 | ₹0Cr | ₹-0Cr | -14.2% | 0.16 | 142.17 | -321.1% |
| FY2024 | ₹0Cr | ₹-0Cr | -4.8% | 0.25 | 82.93 | -99.9% |
| FY2025 | ₹0Cr | ₹-0Cr | -4.6% | 0.30 | 43.11 | -58.6% |
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.