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Return on Equity Calculator
Net Income ÷ Equity — profit per rupee of shareholder capital.
Enter values to see your result
Frequently asked questions
Why is ROE so important?
Measures how efficiently the company compounds shareholder capital. 20% ROE for 10 years = 6× initial investment (if fully reinvested).
DuPont formula?
ROE = Net Margin × Asset Turnover × Equity Multiplier. Decomposes WHERE the ROE comes from — profitability, efficiency, or leverage.
High ROE — always good?
No. Leverage can inflate it. A 25% ROE with 5× debt-equity is less impressive than 20% ROE with no debt.
Why do banks have high ROE?
Natural leverage of banking. 12× equity multiplier turns 1% ROA into 12% ROE. Not a sign of operational excellence alone.