Return on Equity Calculator

Formula

The formula to calculate the Return on Equity (ROE) is:

\[ \text{ROE} = \frac{\text{Net Income}}{\text{Total Equity}} \]

Where:

$\text{Net Income}$ is the company's total earnings
$\text{Total Equity}$ is the net value of the business left to its owners after paying all liabilities

Return on Equity Definition

Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity.

Example Calculation

Let's assume the following values:

Net Income (NI) = $200,000
Total Equity (TE) = $10

Using the formula:

\[ \text{ROE} = \frac{200000}{10} \]

Evaluating:

\[ \text{ROE} = 20000 \]

The Return on Equity (ROE) is 20,000%.

Return on Equity Conversion Table

Net Income ($)	Total Equity ($)	Return on Equity (%)
1000	10	10,000.000000000000
1000	20	5,000.000000000000
1000	30	3,333.333333333333
1000	40	2,500.000000000000
1000	50	2,000.000000000000
2000	10	20,000.000000000000
2000	20	10,000.000000000000
2000	30	6,666.666666666667
2000	40	5,000.000000000000
2000	50	4,000.000000000000
3000	10	30,000.000000000000
3000	20	15,000.000000000000
3000	30	10,000.000000000000
3000	40	7,500.000000000000
3000	50	6,000.000000000000
4000	10	40,000.000000000000
4000	20	20,000.000000000000
4000	30	13,333.333333333334
4000	40	10,000.000000000000
4000	50	8,000.000000000000
5000	10	50,000.000000000000
5000	20	25,000.000000000000
5000	30	16,666.666666666664
5000	40	12,500.000000000000
5000	50	10,000.000000000000