What is this ROE calculator?
A free, browser-based calculator for ROE (Return on Equity) — a key measure of how efficiently a company turns shareholders' equity into profit. Enter net income and shareholders' equity to get the ROE as a percentage. Optionally add revenue and total assets to see the DuPont breakdown (net margin × asset turnover × financial leverage). Everything runs locally in your browser, so your numbers are never uploaded.
How ROE is calculated
ROE = net income ÷ shareholders' equity, expressed as a percentage. For example, net income of 800 on equity of 8,000 gives 800 ÷ 8,000 = 0.10, i.e. 10.00%. Shareholders' equity must be positive; net income may be negative, which produces a negative ROE (a loss-making year). For more accuracy, use the average of beginning and ending equity, since net income is earned over the whole period.
ROE can also be broken down with the DuPont formula: ROE = net margin (net income ÷ revenue) × asset turnover (revenue ÷ total assets) × financial leverage (total assets ÷ equity). This shows whether a high ROE comes from profitability, efficient use of assets, or simply more debt.
What is a good ROE?
In Japan, 8% is often cited as a baseline target (notably by the Ito Review), while many US and European firms aim for 10–15%. Benchmarks vary a lot by industry, so always compare against peers and the company's own trend. And remember: a high ROE driven mainly by leverage carries more financial risk.
How to use it
- Enter net income (a loss can be a negative number) and shareholders' equity.
- Read the ROE percentage on the right.
- Optionally add revenue and total assets to see the DuPont breakdown.
Common use cases
- Comparing the capital efficiency of companies before investing.
- Checking whether a high ROE is driven by profitability or by leverage.
- Tracking your own company's return on equity year over year.
