Return on Equity Calculator

Divide net profit by shareholders equity to measure the return generated on owners capital.

About Return on Equity Calculator

The return on equity is the share of shareholders equity that net profit represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small. Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where higher is better.

Formula

Return on Equity

Return on Equity = Net profit ÷ Shareholders equity × 100

Net profit: The subset being measured
Shareholders equity: The full population it is drawn from

Worked example

With the default values below, Return on Equity Calculator returns Return on Equity of 19.20%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net profitminimum 0: 96,000
Shareholders equityminimum 0: 500,000

Results

Return on Equity: 19.20%
Remaining (whole minus part): 404,000
Equivalent per 1,000: 192.0
One in Every: 5.2

Step by step

1Values used
2Return on Equity
3Return on Equity= 19.20
4Remaining (whole minus part)= 404,000
5Equivalent per 1,000= 192.0
6One in Every= 5.2

Assumptions and limits

The result is derived only from the 2 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation, tax, fees or charges or compounding frequency into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Frequently Asked Questions

How is Return on Equity calculated?

Return on Equity = Net profit ÷ Shareholders equity × 100 The return on equity is the share of shareholders equity that net profit represents, expressed as a percentage. The same figure is also shown per 1,000 and as a "one in every N" odds statement, which is easier to reason about when the rate is very small.

Why does Return on Equity matter?

Absolute counts hide scale — a rate normalises the number so you can compare periods, channels or cohorts of different sizes, where higher is better.

What values do I need to enter?

This calculator takes 2 inputs: Net profit, Shareholders equity. The pre-filled defaults are a realistic starting point — replace them with figures from your own environment for a result you can act on.