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Return on Equity Calculator

Calculate the ratio of entered equity earnings to average equity.

Your numbers

Free calculator
YOUR RESULT
15%

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For informational purposes only. This calculator provides estimates and does not replace financial, investment, tax or accounting advice. Seek advice from a qualified financial professional before making financial decisions. Read our methods and limitations.

When to use this calculator

Calculate the ratio of entered equity earnings to average equity. Uses positive average equity and does not remove leverage effects.

Explore the profitability & liquidity calculators for other questions in this topic. For a related calculation, use the Straight Line Depreciation Calculator: Spread an asset’s depreciable cost evenly over an entered useful life.

PUTTING IT INTO PRACTICE

Return on Equity: a worked example

The values below are an illustrative example, not a recommendation. Replace them with measurements or assumptions that match your question.

Example inputs and calculated result
InputExample value
Net income attributable to equity15,000
Average equity100,000
Result15 %
  1. Check the input labels and enter the example values above.
  2. Apply the relationship: ROE (%) = attributable net income/average equity × 100.
  3. The result is 15 %, rounded for display.

How to interpret your result

Uses positive average equity and does not remove leverage effects.

Gross, operating and net profit include different sets of costs. Balance-sheet ratios describe a date rather than a cash-flow forecast. Compare like accounting periods and definitions before drawing conclusions.

A useful next step is the Loan Payment Calculator: Estimate a fixed monthly repayment for a fully amortising loan.

Frequently asked questions

Can a healthy current ratio guarantee cash is available?

No. Some current assets may be slow to collect or sell, so payment timing and asset quality also matter.

When is the return on equity calculator useful?

Calculate the ratio of entered equity earnings to average equity. Uses positive average equity and does not remove leverage effects.

How do I use the return on equity calculator?

Enter net income attributable to equity, average equity. The result updates automatically. Use the units shown beside each input; the example values illustrate the method.

Which formula does this calculator use?

ROE (%) = attributable net income/average equity × 100.

What should I check before using the result?

Uses positive average equity and does not remove leverage effects.

How are results rounded?

Scalar numbers display up to six decimal places, with scientific notation for very large or small values. Text, fraction, date and schedule outputs use the format described on the tool. Intermediate calculations use JavaScript floating-point arithmetic. Keep sensible precision for your measurements.

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