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Return on Equity (ROE) Calculator

Calculate return on equity (ROE), return on assets (ROA), and debt ratio from your company's financial statements.

Updated July 2026 · Editorial standards

Return on equity (ROE)
20.00%
Return on assets (ROA)
10.00%
Debt ratio
50.00%
Net income$500,000Equity$2,500,000Assets$5,000,000Liabilities$2,500,000

Financial Figures

$
$
$
$

Key figures

Return on equity
20.00%
Return on assets
10.00%
Debt ratio
50.00%
Net income
$500,000

ROE of 20.00% means the company earns 20.00 cents for every dollar of equity. ROA: 10.00%. Debt ratio: 50.00%.ROE above 15% is generally considered strong. Compare ROA to industry peers — it shows true asset productivity without leverage effects. A high ROE driven by high debt may be misleading.

ROE
20.00%
By KalkWiseVerified against official sources Updated July 2026

What is the roe calculator — return on equity?

In short

ROE = net income ÷ shareholders' equity × 100. An ROE above 15% is generally considered strong. Warren Buffett looks for companies with consistent ROE above 15% over 10 years. ROA (return on assets) shows efficiency independent of leverage.

Calculates Return on Equity (ROE), Return on Assets (ROA), and debt ratio from net income, equity, assets, and liabilities.

How to use this calculator

  1. 1Enter annual net income from the income statement.
  2. 2Enter shareholders' equity from the balance sheet.
  3. 3Enter total assets and total liabilities for ROA and debt ratio.

The formula

ROE=net incomeequity×100
ROA=net incometotal assets×100
ROE = NI ÷ E × 100; ROA = NI ÷ A × 100; Debt Ratio = L ÷ A × 100
NI
— Net Income
E
— Shareholders' Equity
A
— Total Assets
L
— Total Liabilities

Worked example

The scenario

Net income $500K, equity $2.5M, assets $5M, liabilities $2.5M.

gives

The result

ROE = 20%. ROA = 10%. Debt ratio = 50%.

Common use cases

  • Evaluate management's effectiveness at generating returns.
  • Compare companies within the same industry.
  • Screen for Buffett-style quality investments.
  • Assess financial leverage risk (high ROE with high debt ratio is a warning sign).

Limitations & assumptions

  • High debt can artificially inflate ROE without real operational improvement.
  • Negative equity makes ROE meaningless.
  • One-time gains or charges distort the metric — use multi-year averages.
  • Compare within industry — capital-intensive businesses have structurally lower ROE.

Frequently asked questions

Above 15% is generally excellent; 10–15% is decent; below 10% may be below the cost of equity. Always compare to peers in the same sector.

Disclaimer: KalkWise calculators are provided for general informational and educational purposes only and do not constitute financial, investment, tax, or legal advice. Results are estimates based on the figures you enter and the assumptions described above. Actual outcomes will vary. Consult a qualified professional before making financial decisions.