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Return on Equity Calculator

Calculate ROE for shareholder returns.

Return on Equity Calculator - Calculate ROE for Shareholder Returns

Return on Equity Calculator

Calculate Return on Equity (ROE) to measure how effectively a company uses shareholders' equity to generate profits. ROE is a key metric for evaluating management performance and company profitability.

Financial Information

Results

Return on Equity

ROE Analysis

Performance Rating:
Industry Benchmark: 10-15% (Typical)

DuPont Analysis Breakdown

Profit Margin:
Asset Turnover:
Equity Multiplier:
ROE = Profit Margin × Asset Turnover × Equity Multiplier

Average Equity Calculation

Beginning Equity:
Ending Equity:
Average Equity:

ROE Formulas & Methods

Basic ROE

ROE = Net Income / Shareholders' Equity

The most straightforward calculation using end-of-period equity.

DuPont Analysis

ROE = Profit Margin × Asset Turnover × Equity Multiplier

Breaks down ROE into profitability, efficiency, and leverage components.

Average Equity

ROE = Net Income / Average Shareholders' Equity

Uses average of beginning and ending equity for more accurate results.

Understanding ROE

ROE Benchmarks

Below 10%: Poor performance
10-15%: Average performance
15-20%: Good performance
Above 20%: Excellent performance

Key Insights

  • Higher ROE indicates more efficient use of shareholders' equity
  • DuPont analysis helps identify sources of ROE performance
  • Compare ROE with industry peers for context
  • Consistent ROE over time is more valuable than one-time spikes
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