DuPont Decomposition
Why does TOTAL earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
8.6% = 1.3% × 3.25 × 2.11
Latest: FY2026
Profitability
Net Margin
1.3%
1.6% →1.3%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
3.25x
4.40x →3.25x
Revenue per ₹ of assets
Leverage
Equity Multiplier
2.11x
2.43x →2.11x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 8.3 pp over 5 years. Driven by asset turnover declining (4.40x → 3.25x), leverage falling (2.43x → 2.11x).
Historical Decomposition
Last 5 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 1.6% | 4.40 | 2.43 | 16.9% |
| FY2023 | ₹0Cr | ₹0Cr | 0.9% | 4.83 | 1.64 | 7.0% |
| FY2024 | ₹0Cr | ₹0Cr | 0.3% | 3.10 | 2.07 | 1.6% |
| FY2025 | ₹0Cr | ₹0Cr | 1.3% | 3.85 | 2.07 | 10.7% |
| FY2026 | ₹0Cr | ₹0Cr | 1.3% | 3.25 | 2.11 | 8.6% |
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.