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Return on equity (ROE) calculator

Compute return on equity from net income and shareholder equity.

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Return on assets (ROA) calculatorCompute return on assets from net income and total assets.Return on net assets calculatorReturn on net assets (RONA) shows how well a company turns its fixed assets and working capital into profit. It divides net income by the sum of fixed assets and working capital, rewarding businesses that generate strong earnings from a lean asset base.Debt-to-equity ratio calculatorCompute a company's debt-to-equity ratio from total debt and equity.Equity multiplier calculatorThe equity multiplier — total assets ÷ shareholders' equity — shows how much of a company's assets are financed by equity versus debt. A value of 2 means half the assets are debt-funded; a higher multiplier signals more financial leverage and risk. The tool also derives the debt ratio (1 − 1/EM) and the equity ratio.ROI calculator (return on investment)Work out your return on investment as a percentage from the amount invested and the amount returned.Debt service coverage ratio (DSCR) calculatorThe DSCR — net operating income ÷ total debt service — tells lenders whether a property or business earns enough to cover its loan payments. A DSCR of 1.25 means income is 25% above the debt due, the level most commercial lenders require. Below 1.0 the cash flow cannot cover the debt.EBITDA calculatorCompute EBITDA by adding back interest, taxes, depreciation and amortization to net income.EBIT calculatorCompute EBIT — earnings before interest and taxes — from operating revenue, operating expenses and any non-operating income. EBIT strips out financing and tax effects to show the raw operating profit a business generates, and the calculator also reports the pure operating income and the EBIT margin.

Enter Net income, Shareholder equity and the Return on equity (ROE) calculator works out Return on equity straight away. For instance, with Net income = $50,000.00 and Shareholder equity = $250,000.00 it returns Return on equity = 20%.

How to use it

  1. Enter your values: Net income, Shareholder equity.
  2. Read the result instantly: Return on equity.

Frequently asked questions

What does the Return on equity (ROE) calculator actually compute?

It takes Net income and Shareholder equity and derives Return on equity from them. The calculation is live as you type, so the result updates on every change.

What information do I need to provide?

2 values: Net income ($) and Shareholder equity ($). Nothing else is required — no account, no file upload.

Can you show a worked example?

With Net income = $50,000.00 and Shareholder equity = $250,000.00, the calculator returns Return on equity = 20%. Those figures come from running this exact tool, so you can reproduce them by entering the same values.

When would I actually use this?

Running the week: issuing an invoice or a quote, knowing what is in stock and what to reorder, and seeing whether cash covers what is due.

What is the most common mistake?

Reading profit as cash. A profitable month with sixty-day payment terms can still leave the account empty — the two numbers answer different questions.

What is the difference between the Return on equity (ROE) calculator and the Return on assets (ROA) calculator?

This one returns Return on equity; the Return on assets (ROA) calculator returns Return on assets. That is the whole difference — open the one whose figure you need.

Is there a tool for the next step?

Return on net assets calculator is the closest one after this: Return on net assets (RONA) shows how well a company turns its fixed assets and working capital into profit. It divides net income by the sum of fixed assets and working capital, rewarding businesses that generate strong earnings from a lean asset base.

What else is worth having open alongside it?

Debt-to-equity ratio calculator and Equity multiplier calculator — they come up in the same task often enough to be worth a second tab.

Where do the figures come from, and how current are they?

The arithmetic is exact for what you enter. Invoice content, VAT treatment and mandatory mentions are set by national rules — an invoice that computes correctly can still be non-compliant.

Further reading

All guides →
ExplainerReturn on Assets: What the Ratio Says About a Business, and What It HidesReturn on assets, return on net assets and return on capital employed are one family with two moving parts. On the same balance sheet they read 8.3%, 10.2% and 15.6% — and the two steps between them are exactly the two decisions you are making.ExplainerWACC Explained, and Why the Number Is Mostly an AssumptionWACC = E/V × Re + D/V × Rd × (1 − T). The tax shield makes debt genuinely cheaper, and the cost of equity comes from CAPM — whose beta and equity risk premium are estimates that move the answer by whole percentage points, and the valuation by a quarter.ExplainerFixed-Charge Cover: the Ratio a Landlord or a Lender Looks AtThe same company, the same year, reads 1.02×, 1.52× or 2.56× depending on where rent is put and whether principal is grossed up for tax. Two of those pass a 1.25 covenant and one does not.ComparisonEBITDA vs EBIT vs Net Income: One P&L, Three AnswersWalked down one $10M P&L: EBITDA of $1.8M, EBIT of $1.1M, net income of $525K. The gap is 70.8 percent of EBITDA — and it is the cost of the assets and the debt the business actually runs on.GuideCosting the Return of an Internal Project That Generates No RevenueThe migration, the tooling change, the process fix: the most common business case there is and the least documented. The value is avoided cost plus recovered time — and on a $130,000 migration, 60.5 % of the recovered hours have to be genuinely redeployed before the five-year net present value even reaches zero.GuideBorrowing for the Business: What the Bank Looks At Before the RateThe coverage ratio is the gate, the guarantee is the second price and the rate is an output. On a 400,000 loan, cutting the rate by a full point moves the coverage ratio by 0.018 — while two extra years of term move it by 0.216. The whole negotiation is in the wrong place.