DuPont Decomposition
Why does SOLARWORLD earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
14.2% = 8.8% × 0.82 × 1.99
Latest: FY2026
Profitability
Net Margin
8.8%
7.9% →8.8%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.82x
0.41x →0.82x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.99x
9.54x →1.99x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 16.9 pp over 5 years. Driven by asset turnover improving (0.41x → 0.82x), leverage falling (9.54x → 1.99x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 7.9% | 0.41 | 9.54 | 31.1% |
| FY2023 | ₹0Cr | ₹0Cr | 6.4% | 1.93 | 5.50 | 67.7% |
| FY2024 | ₹0Cr | ₹0Cr | 10.3% | 3.23 | 2.11 | 70.2% |
| FY2025 | ₹0Cr | ₹0Cr | 14.1% | 0.91 | 1.93 | 24.9% |
| FY2026 | ₹0Cr | ₹0Cr | 8.8% | 0.82 | 1.99 | 14.2% |
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.