ROE Calculator
Reviewed by Hamza Gujjar, Algorithm Architect & Software Developer
Last updated: July 27, 2026
Disclaimer: This calculator is provided for informational and educational purposes only and does not constitute financial, medical, legal, or other professional advice. Always consult a qualified professional before making decisions based on these results.
Profit specifically from shareholders' capital
Unlike ROA, which includes all assets regardless of financing source, ROE isolates the return generated specifically on shareholders' own invested capital.
Worked example
For $50,000 net income against $250,000 in shareholder equity:
ROE = 50000 / 250000 x 100 = 20.0%
A company can artificially boost ROE by taking on more debt (financial leverage) rather than genuinely improving operations - this is why ROE is best examined alongside debt-to-equity ratio, not viewed in isolation, since a high ROE achieved mainly through heavy leverage carries more risk than one achieved through strong operational performance.
This is informational only, not personalized financial advice.