Signal Lab

DuPont ROE Tree

A DuPont driver tree for return on equity (3-step and 5-step).
It measures how margin, asset turnover, leverage — and interest/tax burden — build ROE.
Use it to pick whether margin, turns, or funding is the real ROE lever this period.

Balance Sheet Profitability What-ifs

Signal Lab · Model

DuPont ROE Tree

Decompose return on equity into margin, asset turnover, and leverage — classic 3-step or extended 5-step with interest and tax burden. Jump to driver tree

Illustrative AU sample until you enter actuals. Not financial advice.

Prior and current P&L / balance sheet

Toggle 3-step vs 5-step. Direct NI overrides EBT − Tax when you type it. Persist locally · Jump to driver tree

DuPont steps

Prior period

Current period

ROE driver tree

Prior vs current vs Δ. Highlight shows which driver moved ROE most (hold-others-at-prior).

Equations

    Product chain

    Each card is a multiplicative driver. Top mover uses absolute ROE contribution holding other drivers at prior.

    How this is calculated
    • EBT = EBIT − Interest · Computed NI = EBT − Tax (display). Typed NI overrides for ratios.
    • 3-step: NPM (net profit margin) = NI ÷ Sales · AT (asset turnover) = Sales ÷ Assets · EM (equity multiplier) = Assets ÷ Equity · ROE = NPM × AT × EM
    • 5-step: EBIT margin × Interest burden (EBT÷EBIT) × Tax burden (NI÷EBT) × AT × EM
    • Check: ROE also equals NI ÷ Equity when inputs reconcile
    • Top mover: for each driver, set that driver to current and hold others at prior; contribution = that ROE − prior ROE

    Illustrative DuPont tree — not financial advice.

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    Download a prompt, export the Excel workbook, or email yourself.

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