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Financial Statement Analysis of the Nasdaq-100 Companies: Profitability Trends, DuPont Decomposition and Distress Risk in the Post-Pandemic Period (2020-2025)
Subject area: Management and Commerce · Area of research: Financial Statement Analysis and Performance
DOI: 10.64388/IREV10I4-1723596
Abstract
This research undertakes an extensive financial statement analysis of 88 companies, comprising the Nasdaq-100 components, over the period 2020–2025, including the COVID-19 crisis, the subsequent recovery, and the artificial intelligence-led market rally. We employ a panel data set of profitability, leverage, efficiency and solvency indicators and use the DuPont decomposition framework to identify the drivers of return on equity and the Altman Z-score model to measure financial distress risk. Our analysis shows substantial sectoral heterogeneity in financial performance: Technology firms have the highest profitability margins but moderate asset turnover, while Consumer Cyclical firms have strong leverage-adjusted returns driven by high turnover. The modified Altman Z-score identifies three firms in the distress zone and ten in the grey zone as of 2024, concentrated in the Utilities and Real Estate sectors. Our DuPont decomposition shows that margin expansion rather than leverage or turnover has been the primary driver of ROE improvement since 2022, a pattern consistent with the sustainability concerns raised in prior literature on margin versus turnover driven ROE (Fairfield and Yohn, 2001; Soliman, 2008), though this study’s descriptive design does not test valuation sustainability directly.These findings contribute to the empirical accounting literature by providing granular evidence on the fundamental drivers of performance in the largest non-financial U.S. technology firms.
Keywords
Financial statement analysis, Nasdaq-100, DuPont decomposition, Altman Z-score, profitability, leverage, financial distress, COVID-19, panel data
References
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How to cite this paper
@article{1723596,
author = {Mustapha Bunu Mustapha},
title = {Financial Statement Analysis of the Nasdaq-100 Companies: Profitability Trends, DuPont Decomposition and Distress Risk in the Post-Pandemic Period (2020-2025)},
journal = {Iconic Research And Engineering Journals},
year = {2026},
volume = {10},
number = {4},
pages = {211-219},
issn = {2456-8880},
url = {https://www.irejournals.com/formatedpaper/1723596.pdf},
abstract = {This research undertakes an extensive financial statement analysis of 88 companies, comprising the Nasdaq-100 components, over the period 2020–2025, including the COVID-19 crisis, the subsequent recovery, and the artificial intelligence-led market rally. We employ a panel data set of profitability, leverage, efficiency and solvency indicators and use the DuPont decomposition framework to identify the drivers of return on equity and the Altman Z-score model to measure financial distress risk. Our analysis shows substantial sectoral heterogeneity in financial performance: Technology firms have the highest profitability margins but moderate asset turnover, while Consumer Cyclical firms have strong leverage-adjusted returns driven by high turnover. The modified Altman Z-score identifies three firms in the distress zone and ten in the grey zone as of 2024, concentrated in the Utilities and Real Estate sectors. Our DuPont decomposition shows that margin expansion rather than leverage or turnover has been the primary driver of ROE improvement since 2022, a pattern consistent with the sustainability concerns raised in prior literature on margin versus turnover driven ROE (Fairfield and Yohn, 2001; Soliman, 2008), though this study’s descriptive design does not test valuation sustainability directly.These findings contribute to the empirical accounting literature by providing granular evidence on the fundamental drivers of performance in the largest non-financial U.S. technology firms.},
keywords = {Financial statement analysis, Nasdaq-100, DuPont decomposition, Altman Z-score, profitability, leverage, financial distress, COVID-19, panel data},
month = {October},
doi = {https://doi.org/10.64388/IREV10I4-1723596}
}