ROE

Free ROE calculator with clear step-by-step results.

About ROE

Return on equity shows how much profit a company generates for each dollar of equity.

Formula

ROE = net income ÷ shareholders' equity × 100

Worked example

With the default values below, ROE returns Return on Equity of 20.00%. Change any input above and every figure here is recalculated in your browser.

Inputs used

Net incomeminimum 0 $: 50,000 $
Shareholders' equityminimum 0 $: 250,000 $

Results

Return on Equity: 20.00%
Income per $100 of Equity: $20.00
Leverage Effect: 0.20

Step by step

1Values used
2Formula
3Return on Equity= 20.00
4Income per $100 of Equity= 20.00
5Leverage Effect= 0.20

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 does this calculator work?

Return on equity shows how much profit a company generates for each dollar of equity.

Why does this matter?

High ROE can come from leverage rather than operating excellence.

ROE