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Return on Equity (ROE) Calculator
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Enter net income and shareholder equity to instantly calculate your ROE percentage. A perfect tool for investors evaluating company profitability.
Enter financial data to calculate ROE
Overview
Understand what the tool solves, how it works, and the boundaries of its data.
Return on equity (ROE) compares a profit measure with shareholders’ equity. This calculator applies the two values exactly as entered:
ROE (%) = net income ÷ shareholder equity × 100
For example, net income of $50,000 and equity of $200,000 gives 25.00%. The dollar signs are illustrative; the calculation is a ratio, so both inputs must use the same currency and a consistent reporting basis. The displayed percentage is rounded to two decimal places.
The calculator uses the equity figure you enter; it does not select an accounting period, annualize income, or compute average equity. In financial reporting, ROE may be calculated using average equity over a matching period. A company filing example reported annualized net income over average equity, illustrating that the convention can vary with the analysis. The SEC-filed example supports that period and denominator distinction; it is not a universal formula mandate.
Equity can change during a year because of earnings, dividends, share issuance, repurchases, and other events. If you use beginning equity, ending equity, or an average, label the choice and apply it consistently when comparing periods or companies.
Guide
Follow the workflow and verify inputs and outputs with practical examples.
Decide whether you are calculating for a quarter, year, or another period. Use net income and equity values that correspond to that same analysis.
Use the net income amount selected for your calculation. If you intend to annualize a partial-period figure, calculate that adjustment separately and document it; this page does not annualize.
Supply the equity denominator you intend to use, such as an ending balance or a calculated average. This calculator does not derive an average from balance-sheet dates.
The percentage appears to two decimal places. For $50,000 divided by $200,000, then multiplied by 100, the result is 25.00%. Clear the fields before entering a different case.
Use cases
See how the tool fits into real work and everyday tasks.
Enter a known net income and equity pair to verify the arithmetic in a spreadsheet or finance class example.
Calculate separate periods using the same definition of income and equity, then investigate changes in the underlying statements.
Recreate a simple ROE figure from published financial data, making a note of any annualization, preferred dividends, or average-equity convention used.
Q&A
Find concise answers to common questions and confusing cases.
No. It divides net income by the equity value you enter. If your analysis calls for average equity, calculate that input yourself from the relevant balances.
A negative net income produces a negative percentage when equity is positive. Interpret the result in context; it indicates the sign of the arithmetic, not a forecast.
Division by zero is undefined, so the calculator does not display an ROE percentage when equity is zero.
Notes
Review scope, result limitations, and important precautions before use.
ROE is a ratio, not a complete measure of investment quality or company performance. Results can be affected by leverage, unusual gains or losses, accounting choices, and the selected equity denominator. This calculator does not assess valuation, risk, or suitability and is not investment advice. Verify source figures and conventions before using a result in a financial decision.
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