Return on Equity Calculator
Divide net income by shareholders' equity to find return on equity, how much profit a company generates from the money shareholders have invested.
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Enter net income and equity to see ROE.
Worked example
With these example inputs:
- Net income$5,000,000
- Shareholders' equity$40,000,000
Return on equity: 12.5%
- If the first figure were 10% higher13.75%
Frequently asked questions
What is return on equity?
ROE is net income as a percentage of shareholders' equity. It shows how efficiently a company turns the owners' capital into profit.
What is a good ROE?
It varies by industry, but many investors look for double-digit figures. Very high ROE can also come from heavy debt, so check the balance sheet too.