Return on Equity (ROE)
ROE = Net Income / Avg Shareholders' Equity. Profitability per dollar of equity.
Result
ROE
13.33%
Average (10-15%)
- Net Income$200
- Avg Equity$1,500
- ROE13.333%
- TierAverage (10-15%)
Step-by-step
- ROE = NI / Equity = 200 / 1500 = 0.1333 = 13.33%.
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
Equity changes during the year. Use beginning + ending / 2 for less noise than year-end snapshot.
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Current Ratio
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Debt-to-Equity Ratio
D/E = Total Debt / Total Equity. Leverage relative to ownership.
WACC Calculator
WACC = (E/V)·Re + (D/V)·Rd·(1−T). Blended cost of capital weighted by debt + equity.