Return on Equity Calculator
Calculate your return on equity (ROE) instantly. Enter net income and shareholders' equity to see your ROE, profitability rating, and an optional DuPont 3-factor breakdown. Free, no sign-up required.
Total profit after all expenses, taxes, and interest. Found on the income statement (bottom line).
Total equity attributable to shareholders (assets minus liabilities). Found on the balance sheet.
Select your sector to compare against typical industry benchmarks. Different industries have different acceptable ROE ranges.
📌 Optional: DuPont 3-Factor Analysis (enter for deeper breakdown)
Total revenue / sales for the period. Required for profit margin and asset turnover.
Total assets from the balance sheet. Required for asset turnover and equity multiplier.
📈 Return on Equity (ROE)
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Net Income
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Shareholders' Equity
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🔧 DuPont 3-Factor Breakdown
Net Income ÷ Revenue
Revenue ÷ Total Assets
Total Assets ÷ Equity
📌 ROE Rating Scale & Sector Benchmark
💡 What this means
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- Enter Net Income — the company's total profit after all expenses, found on the income statement (the bottom line).
- Enter Shareholders' Equity — total equity (assets minus liabilities), found on the balance sheet.
- Select your sector (optional) — to compare your ROE against typical industry benchmarks, since acceptable returns vary by sector.
- Expand DuPont section (optional) — enter Revenue and Total Assets for a 3-factor decomposition showing whether returns come from margins, efficiency, or leverage.
- Click Calculate — see your ROE, a profitability rating, a benchmark comparison table, and a plain-English interpretation instantly.
📌 5 tips for interpreting your return on equity
- ✓ Watch the trend, not just the snapshot. A consistent 15% ROE over 5 years is more impressive than a one-year 30% spike. Track ROE annually to see if management is improving or losing efficiency.
- ✓ Use the DuPont breakdown to find the driver. High ROE from strong profit margins is sustainable. High ROE from a large equity multiplier (debt) is riskier. Always check which factor is doing the heavy lifting.
- ✓ Compare within your sector. A 12% ROE may be excellent for a bank but poor for a software company. Always benchmark against industry peers, not generic thresholds. Use the sector selector above.
- ✓ Beware of artificially high ROE. Share buybacks reduce equity, inflating ROE without improving operations. Negative equity from accumulated losses can produce a misleadingly high ROE. Check the equity trend alongside the ratio.
- ✓ Pair ROE with ROA for the full picture. ROE tells you the return on equity; ROA tells you the return on total assets. A wide gap between the two signals high leverage. If ROE is 20% but ROA is only 4%, the company is amplifying returns with debt.
Disclaimer: This calculator provides return on equity estimates for educational and analysis purposes only. Actual financial assessments should consider additional ratios (ROA, ROIC, current ratio, debt-to-equity), cash flow patterns, multi-year trends, and forward-looking projections. Consult a financial advisor or accountant for professional guidance.
Related Tools
ROE is one piece of your corporate finance picture. These six calculators cover the rest — from ROI and interest coverage to working capital and break-even analysis.
- ROI Calculator — measure the return on investment for specific projects or capital allocations, complementing your company-wide ROE figure.
- Interest Coverage Ratio Calculator — check whether your operating profit can cover interest payments, a key solvency metric to pair with ROE when evaluating leverage.
- Working Capital Calculator — measure your short-term liquidity (current assets minus current liabilities) to ensure operations can support your equity returns.
- Break-Even Calculator — find the revenue level where total costs are covered, the minimum threshold your business must clear before generating positive ROE.
- Cash Flow Calculator — project your operating cash flow, the actual cash generated to reinvest and grow the equity base that drives your ROE.
- Profit Margin Calculator — the first factor in the DuPont decomposition. Measure your net profit margin to understand what drives your ROE.