DuPont ROE Calculator
The DuPont model takes return on equity apart so you can see why a company earns the return it does. It multiplies net profit margin, asset turnover, and the equity multiplier: profitability, efficiency, and leverage. Two firms with identical ROE can have very different engines behind it, and the breakdown makes that clear. This calculator takes net income, revenue, total assets, and shareholders' equity, then returns each of the three components and the combined ROE. All figures are in US dollars; take them from the same period in a company's SEC filings.
DuPont ROE formula
Net profit margin = net income / revenue
Asset turnover = revenue / total assets
Equity multiplier = total assets / shareholders' equity
ROE = net profit margin * asset turnover * equity multiplier
The revenue and asset terms cancel, so the product reduces to net income divided by equity. Splitting ROE this way shows whether returns come from margins, efficient asset use, or leverage.
Reading the breakdown
- A high ROE driven mainly by the equity multiplier reflects leverage, which adds risk.
- A high ROE from margin and turnover reflects operating strength rather than borrowing.
- Compare each component to peers to see where a company leads or lags.
- Use figures from the same period for all four inputs.
- Enter your own statement figures; the tool stores no preset data.
DuPont ROE: frequently asked questions
What is the DuPont model?
The DuPont model decomposes return on equity into three drivers: net profit margin (profitability), asset turnover (efficiency), and the equity multiplier (financial leverage). Multiplying the three gives ROE, showing whether returns come from margins, asset use, or borrowing.
What is the DuPont ROE formula?
ROE = net profit margin x asset turnover x equity multiplier. That is: (net income / revenue) x (revenue / total assets) x (total assets / shareholders' equity). The revenue and asset terms cancel algebraically, leaving net income / equity, which is ROE.
What is the equity multiplier?
The equity multiplier is total assets divided by shareholders' equity. It measures financial leverage: a multiplier of 2 means assets are twice equity, so half the asset base is funded by liabilities. A higher multiplier raises ROE but also raises risk.
Why break ROE into three parts?
Two companies can have the same ROE for very different reasons. One may earn high margins, another may turn assets quickly, a third may simply use a lot of debt. The DuPont breakdown reveals the source of returns and flags whether ROE is driven by performance or leverage.
Where do the inputs come from?
Net income and revenue come from the income statement. Total assets and shareholders' equity come from the balance sheet. All four appear in a company's annual report (Form 10-K) filed with the SEC. Use figures from the same reporting period.
Official sources
- U.S. Securities and Exchange Commission, company filings and reports: sec.gov.
- Investor.gov, financial statement basics: investor.gov.
Reviewed by the CalculatorHub team, edited by James Graham, 17 June 2026. See our methodology.