DuPont Analysis Calculator — ROE Decomposition
The DuPont analysis breaks ROE into three (or five) levers so you can pinpoint whether profitability, efficiency or leverage is driving — or limiting — returns. Enter income statement and balance sheet figures to see each driver.
ROE = Net Profit Margin × Asset Turnover × Equity Multiplier
ROE
30%Profit margin
3.6%
Asset turnover
37.1%
Equity multiplier
59.3%
- 1
Net profit margin
120,000 ÷ 1,000,000 = 0.12 - 2
Asset turnover
1,000,000 ÷ 800,000 = 1.25 - 3
Equity multiplier
800,000 ÷ 400,000 = 2 - 4
Return on Equity (ROE)
0.12 × 1.25 × 2 × 100 = 30Net profit margin × asset turnover × equity multiplier equals ROE — the three factors always multiply back to Net Income ÷ Equity.
How does this calculator work?
DuPont identity: ROE = (Net Income ÷ Revenue) × (Revenue ÷ Assets) × (Assets ÷ Equity). It decomposes return on equity into profitability, efficiency and leverage. The 5-factor version also separates tax and interest burdens from operating margin. Enter four balance-sheet numbers to see each driver.
Formula
How this is calculated
DuPont analysis was developed by the DuPont Corporation in the 1920s to help managers understand which aspects of a business drive return on equity. The three-factor identity says ROE equals the product of net profit margin (how much of each revenue dollar becomes profit), asset turnover (how efficiently the company generates revenue from its assets), and the equity multiplier (how much of those assets are funded by debt rather than equity). Multiplied together, these always equal ROE = Net Income ÷ Equity.
The five-factor extension further splits the profit margin into three components: the tax burden (net income ÷ EBT, i.e. how much profit survives taxation), the interest burden (EBT ÷ EBIT, i.e. how much operating profit survives interest payments), and the EBIT margin (EBIT ÷ revenue). This lets you separately identify the impact of operating efficiency, financing costs and the tax rate. Fill in EBIT and EBT to activate the five-factor view.
Limitations: DuPont uses accounting figures that can be affected by different accounting policies, depreciation methods and one-off items. It is most useful as a comparative tool — comparing a company against itself over time or against sector peers — rather than as an absolute performance benchmark. Negative equity or net losses make the ratios hard to interpret meaningfully.
Frequently asked questions
A high equity multiplier means the company funds a large proportion of its assets with debt. This amplifies ROE when times are good but increases risk and interest costs. Banks and utilities typically have high multipliers; technology firms tend to have lower ones.
In theory they should be identical — the three factors algebraically cancel to Net Income ÷ Equity. Small rounding differences may appear; if there is a meaningful gap, check that you are using the same income and balance-sheet figures consistently.
It depends on the business. Retailers typically have thin margins and high turnover; improving turnover further may be harder than cutting costs to widen margin. Capital-intensive industries may have lower turnover that is hard to move. DuPont helps you find where you are weak relative to peers.
Also known as
TG we-Calculate Editorial Team. (2026). DuPont Analysis Calculator — ROE Decomposition [Online calculator]. TG we-Calculate. https://we-calculate.com/calculator/dupont-analysis-calculator
TG we-Calculate Editorial Team. "DuPont Analysis Calculator — ROE Decomposition." TG we-Calculate. 2026. https://we-calculate.com/calculator/dupont-analysis-calculator.
TG we-Calculate Editorial Team, "DuPont Analysis Calculator — ROE Decomposition," TG we-Calculate, 2026. [Online]. Available: https://we-calculate.com/calculator/dupont-analysis-calculator
@misc{wecalculate_dupont_analysis_calculator, title = {DuPont Analysis Calculator — ROE Decomposition}, author = {{TG we-Calculate Editorial Team}}, howpublished = {\url{https://we-calculate.com/calculator/dupont-analysis-calculator}}, year = {2026}, note = {TG we-Calculate} }
Did this calculator help you?