Calculator
Return on equity calculator
Net income divided by shareholders' equity. Type your own numbers; nothing is sent anywhere.
The formula
Return on equity = net income รท shareholders' equity
A worked example
Net income of $150,000,000 on equity of $1,000,000,000 is a return on equity of 15.0%.
How to read it
Return on equity shows profit relative to the owners' book capital. It rises when a company borrows more or repurchases shares, and it is not meaningful when equity is zero or negative.
Educational, not investment advice. The result is arithmetic on the inputs you typed.
Using real company figures
Company pages show the EPS, book value per share and free cash flow per share from each company's latest annual report to the SEC, which you can copy into this calculator. Browse 487 companies or start the worksheet with a company.
Questions
Average or year-end equity?
Either is used. Be consistent when you compare companies. Company pages here use year-end equity.
Other calculators
- Graham numberThe square root of 22.5 times earnings per share times book value per share.
- Discounted cash flowPresent value of future free cash flow per share, using growth and discount rates you choose.
- P/E ratioPrice divided by earnings per share, and its inverse, the earnings yield.
- Book value per shareShareholders' equity divided by shares, and the price-to-book ratio if you add a price.
- PEG ratioP/E divided by an expected annual earnings growth rate you enter.
- Dividend discount modelValue of a dividend that grows at a steady rate, discounted at the return you require.
- Free cash flow yieldFree cash flow per share as a percentage of a price you enter.