ROE calculator

A net profit of Rs 1,200 crore on average equity of Rs 8,000 crore is an ROE of 15.00%. Enter figures from a company's annual report in the same units.

ROE on average equity15.00%
ROE on closing equity14.12%
Average shareholders' equityRs 8,000

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How it works

ROE measures profit earned on the money shareholders have in the business. Using the average of opening and closing equity is more accurate when equity changes a lot during the year. Use the same units (crore or lakh) for every input.

Formula

ROE = net profit / average shareholders' equity x 100

Frequently asked questions

How is ROE calculated?

Net profit divided by shareholders' equity, times 100; analysts often use average equity.

Where do I find the numbers?

In the company's annual report: net profit in the profit and loss statement, equity in the balance sheet.

Can debt inflate ROE?

Yes; high borrowing raises ROE on a smaller equity base, so look at debt too.

Related

This tool is for information only and is not investment, tax or legal advice. Results depend on the inputs and assumptions you enter; check important figures with the official source or a qualified professional.