To calculate the Return on Equity (ROE) using the 3-part DuPont model, you multiply the three components: Profit Margin, Total Asset Turnover, and Equity Multiplier. The formula is:

$\text{ROE} = \text{Profit Margin} \times \text{Total Asset Turnover} \times \text{Equity Multiplier}$

Given the values:

2021

$\text{ROE}_{2021} = 25.881793 \times 2.7130514 \times 1.4900981$

2022

$\text{ROE}_{2022} = 25.309641 \times 2.9122115 \times 2.0723458$

2023

$\text{ROE}_{2023} = 25.306234 \times 2.6697477 \times 2.2755746$

I'll calculate each year’s ROE:

2021

$\text{ROE}_{2021} \approx 25.881793 \times 2.7130514 \times 1.4900981 \approx 104.67$

2022

$\text{ROE}_{2022} \approx 25.309641 \times 2.9122115 \times 2.0723458 \approx 152.56$

2023

$\text{ROE}_{2023} \approx 25.306234 \times 2.6697477 \times 2.2755746 \approx 153.67$

Results

• ROE 2021: Approximately 104.67%
• ROE 2022: Approximately 152.56%
• ROE 2023: Approximately 153.67%

Would you like more details on the calculations or have any other questions?

Here are some related questions:

1. How does an increase in the Equity Multiplier affect ROE?
2. What is the significance of the Profit Margin in the DuPont model?
3. Can the DuPont model help identify areas for business improvement?
4. Why is the Total Asset Turnover a key component in ROE analysis?
5. What would happen to ROE if one of these metrics declined?

Tip: The DuPont model helps identify which components (profitability, efficiency, or leverage) are driving ROE changes.