DuPont Decomposition
Why does VLSFINANCE earn its ROE?
Breaking down Return on Equity into profitability, efficiency, and leverage.
ROE = Net Margin × Asset Turnover × Equity Multiplier
1.9% = 64.1% × 0.03 × 1.10
Latest: FY2025
Profitability
Net Margin
64.1%
750.8% →64.1%
How much profit per ₹ of revenue
Efficiency
Asset Turnover
0.03x
0.01x →0.03x
Revenue per ₹ of assets
Leverage
Equity Multiplier
1.10x
1.24x →1.10x
Assets funded by equity vs debt
Trend Analysis
ROE declined by 5.2 pp over 4 years. Driven by net margin declining (750.8% → 64.1%).
Historical Decomposition
Last 4 years
| Year | Revenue | PAT | Net Margin | Asset TO | Leverage | ROE |
|---|---|---|---|---|---|---|
| FY2022 | ₹0Cr | ₹0Cr | 750.8% | 0.01 | 1.24 | 7.1% |
| FY2023 | ₹0Cr | ₹0Cr | 69.4% | 0.03 | 1.22 | 2.2% |
| FY2024 | ₹0Cr | ₹0Cr | 85.8% | 0.11 | 1.19 | 10.9% |
| FY2025 | ₹0Cr | ₹0Cr | 64.1% | 0.03 | 1.10 | 1.9% |
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.