DuPont Decomposition
Why does TIPSFILMS earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
-100.0% = -61.3% × 0.27 × 5.98
Latest: FY2025
Profitability
Net Margin
-61.3%
10.4% →-61.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.27x
0.76x →0.27x
Revenue per ₹ of assets
Leverage
Equity Multiplier
5.98x
1.30x →5.98x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 110.2 pp over 4 years. Driven by net margin declining (10.4% → -61.3%), asset turnover declining (0.76x → 0.27x), leverage rising (1.30x → 5.98x). 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 | 10.4% | 0.76 | 1.30 | 10.3% |
| FY2023 | ₹0Cr | ₹0Cr | 39.6% | 0.42 | 1.58 | 26.5% |
| FY2024 | ₹0Cr | ₹0Cr | 1.4% | 0.74 | 1.15 | 1.2% |
| FY2025 | ₹0Cr | ₹-0Cr | -61.3% | 0.27 | 5.98 | -100.0% |
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.