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Return on Equity Calculator

Calculate Return on Equity (ROE)



Formula

The formula to calculate the Return on Equity (ROE) is:

ROE=(Net ProfitEquity)×100

Where:

What is Return on Equity?

Return on Equity (ROE) is the ratio of net profit to total equity spent on a project. It is a measure of the profitability of a business in relation to the equity.

Example Calculation 1

Let's assume the following values:

Using the formula:

ROE=(50,000200,000)×100=25%

The Return on Equity is 25%.

Example Calculation 2

Let's assume the following values:

Using the formula:

ROE=(75,000300,000)×100=25%

The Return on Equity is 25%.