Return On Equity Calculator
About Return On Equity Calculator
The Return On Equity Calculator is used to calculate the return on equity (ROE) ratio.
Return On Equity Definition
Return on equity (ROE) is equal to a fiscal year’s net income (after preferred stock dividends but before common stock dividends) divided by total equity (excluding preferred shares), expressed as a percentage. It measures the rate of return on the ownership interest of the common stock owners and measures a company’s efficiency at generating profits from every unit of shareholders’ equity.
Return On Equity Formula
The Return On Equity calculation formula is as follows:
Return on Equity = Net Income after Tax / Shareholder's Equity