Return on Equity (ROE)
ROE = Net Income / Avg Shareholders' Equity. Profitability per dollar of equity.
Result
General calculation reads
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How to use this calculator
- Get net income + average equity from filings.
- Decompose by DuPont if comparing across companies.
About this calculator
ROE measures how efficiently a company generates profit from shareholders' equity. >15% is strong; >25% excellent (often unsustainable long-term). DuPont decomposition: ROE = Net Margin × Asset Turnover × Equity Multiplier — separates operating efficiency, asset efficiency, and leverage. High ROE driven by leverage (high D/E) is risk-amplified, not productivity. Apple sustains 100%+ ROE; most companies hover 10-20%.
Frequently asked
Why "average" equity?+
High ROE always good?+
DuPont decomposition?+
Industry norms?+
Negative equity = ?+
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ROA = Net Income / Avg Total Assets. Profitability per dollar of all assets.
D/E = Total Debt / Total Equity. Leverage relative to ownership.
EBITDA = Net Income + Interest + Tax + D&A. Operating earnings before financing + non-cash items.
WACC = (E/V)·Re + (D/V)·Rd·(1−T). Blended cost of capital weighted by debt + equity.
FCF = EBIT(1−T) + D&A − CapEx − ΔNWC. Cash available to all capital providers.
Total return, annualized return (CAGR), and dollar gain — with optional IRR mode for regular contributions.