DuPont Analysis: Decomposition of ROE

Annual Data

Quarterly Data
Decomposing ROE involves expressing net income divided by shareholders' equity as the product of component ratios.

Two-Component Disaggregation of ROE

Three-Component Disaggregation of ROE
Five-Component Disaggregation of ROE
Two-Way Decomposition of ROA
Four-Way Decomposition of ROA
Decomposition of Net Profit Margin

See Also:
Novartis AG (NVS), DuPont analysis
Pfizer Inc. (PFE), DuPont analysis
Merck & Co. Inc. (MRK), DuPont analysis
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Two-Component Disaggregation of ROE

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of ROE

ROE

ROA

Leverage

Dec 29, 2013

18.68%

10.42%

1.79

Dec 30, 2012

16.74%

8.94%

1.87

Dec 31, 2011

16.94%

8.51%

1.99

Dec 31, 2010

23.57%

12.96%

1.82

Dec 31, 2009

24.25%

12.95%

1.87

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2013 year is the increase in profitability measured by Return on Assets
(ROA).
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Three-Component Disaggregation of ROE

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of ROE

ROE

Net Profit Margin

Asset Turnover

Leverage

Dec 29, 2013

18.68%

19.40%

0.54

1.79

Dec 30, 2012

16.74%

16.14%

0.55

1.87

Dec 31, 2011

16.94%

14.87%

0.57

1.99

Dec 31, 2010

23.57%

21.65%

0.60

1.82

Dec 31, 2009

24.25%

19.82%

0.65

1.87

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2013 year is the increase in profitability measured by Net Profit Margin.
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Five-Component Disaggregation of ROE

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of ROE

ROE

Tax Burden

Interest Burden

EBIT Margin

Asset Turnover

Leverage

Dec 29, 2013

18.68%

0.89

0.97

22.37%

0.54

1.79

Dec 30, 2012

16.74%

0.77

0.96

21.79%

0.55

1.87

Dec 31, 2011

16.94%

0.78

0.96

19.89%

0.57

1.99

Dec 31, 2010

23.57%

0.79

0.97

28.26%

0.60

1.82

Dec 31, 2009

24.25%

0.78

0.97

26.18%

0.65

1.87

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Return on Equity (ROE) over 2013 year is the increase in effect of taxes measured by Tax Burden.
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Top

Two-Way Decomposition of ROA

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of ROA

ROA

Net Profit Margin

Asset Turnover

Dec 29, 2013

10.42%

19.40%

0.54

Dec 30, 2012

8.94%

16.14%

0.55

Dec 31, 2011

8.51%

14.87%

0.57

Dec 31, 2010

12.96%

21.65%

0.60

Dec 31, 2009

12.95%

19.82%

0.65

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Return on Assets (ROA) over 2013 year is the increase in profitability measured by Net Profit Margin.
ADVERTISEMENT

Top

Four-Way Decomposition of ROA

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of ROA

ROA

Tax Burden

Interest Burden

EBIT Margin

Asset Turnover

Dec 29, 2013

10.42%

0.89

0.97

22.37%

0.54

Dec 30, 2012

8.94%

0.77

0.96

21.79%

0.55

Dec 31, 2011

8.51%

0.78

0.96

19.89%

0.57

Dec 31, 2010

12.96%

0.79

0.97

28.26%

0.60

Dec 31, 2009

12.95%

0.78

0.97

26.18%

0.65

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Return on Assets (ROA) over 2013 year is the increase in effect of taxes measured by Tax Burden.
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Top

Decomposition of Net Profit Margin

Annual Data

Quarterly Data
Johnson & Johnson, decomposition of Net Profit Margin

Net Profit Margin

Tax Burden

Interest Burden

EBIT Margin

Dec 29, 2013

19.40%

0.89

0.97

22.37%

Dec 30, 2012

16.14%

0.77

0.96

21.79%

Dec 31, 2011

14.87%

0.78

0.96

19.89%

Dec 31, 2010

21.65%

0.79

0.97

28.26%

Dec 31, 2009

19.82%

0.78

0.97

26.18%

Source: Based on data from Johnson & Johnson Annual Reports

The primary reason for the increase in Net Profit Margin over 2013 year is the increase in effect of taxes measured by Tax Burden.