Return on Earnings Calculator

Calculate your Return on Earnings (ROE) to assess your investment profitability and financial performance

Input Parameters

Calculation Results

Calculation Formula

ROE = Net Income / Total Shareholder Equity × 100%

Where:
- Net Income is your company's total earnings after taxes
- Total Shareholder Equity is the total value of shareholders' investments in the company

--%
Enter your values to see interpretation

Return on Earnings Calculator Usage Guide

Learn how to use the Return on Earnings Calculator and interpret its results

How to Use This Calculator

  1. Enter your company's Net Income (total earnings after taxes) in the first field.
  2. Enter your company's Total Shareholder Equity (total value of shareholders' investments) in the second field.
  3. Select the appropriate Time Period (annual, quarterly, or monthly) that matches your financial data.
  4. Click the Calculate button to compute your Return on Earnings.

Understanding Return on Earnings (ROE)

Return on Earnings (ROE) is a key financial metric that measures how effectively a company is using its shareholders' investments to generate profit. It shows the percentage of net income returned as earnings, per dollar of shareholders' equity.

The formula is simple:

ROE = (Net Income / Total Shareholder Equity) × 100%

Interpreting Your Results

  • ROE below 5%: Consider analyzing cost structure and efficiency improvements.
  • ROE between 5% and 15%: Good performance, but there might be room for improvement.
  • ROE between 15% and 25%: Strong ROE. Excellent performance compared to industry averages.
  • ROE above 25%: Exceptional ROE. Consider reinvesting profits for sustainable growth.

Note: Compare your ROE to industry averages and historical performance for more meaningful analysis.