DuPont Decomposition
Why does TIPSMUSIC earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
79.5% = 53.6% × 0.92 × 1.62
Latest: FY2025
Profitability
Net Margin
53.6%
35.2% →53.6%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.92x
0.27x →0.92x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.62x
1.41x →1.62x
Assets funded by equity vs debt
Trend Analysis
ROE improved by 66.0 pp over 3 years. Driven by net margin improving (35.2% → 53.6%), asset turnover improving (0.27x → 0.92x), leverage rising (1.41x → 1.62x).
Historical Decomposition
Last 3 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2023 | ₹0Cr | ₹0Cr | 35.2% | 0.27 | 1.41 | 13.5% |
| FY2024 | ₹0Cr | ₹0Cr | 40.7% | 0.19 | 1.89 | 14.3% |
| FY2025 | ₹0Cr | ₹0Cr | 53.6% | 0.92 | 1.62 | 79.5% |
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.