Accounting Share · Financial ratios
Return on Equity Calculator
Relate owners’ income to the average corresponding equity base. The numerator and denominator should refer to the same ownership interest.
The interactive calculator requires JavaScript. The formula and worked example below remain available.
01 / Enter your figures
Make the numbers yours.
Use one currency and consistent time periods. Amounts are shown in your input currency units; no currency conversion is performed.
02 / See the working
Your calculation
Enter your figures, then choose Calculate. Or load the worked example.
03 / Understand the method
Formula and method
Attributable income ÷ Average equity × 100
Relate owners’ income to the average corresponding equity base. The numerator and denominator should refer to the same ownership interest.
How to use this calculator
- Collect the figures for the same entity, currency and reporting period.
- Enter each input using its label and unit. For percentages, enter 15 to mean 15%.
- Choose Calculate, inspect the breakdown and compare the result with your assumptions.
- Change one input to explore a scenario. Recalculate after edits; display rounding does not round the underlying calculation.
Inputs at a glance
- Income attributable to the equity measured: May be positive, zero or negative; the sign changes its effect in the displayed formula.
- Beginning equity: May be positive, zero or negative; the sign changes its effect in the displayed formula.
- Ending equity: May be positive, zero or negative; the sign changes its effect in the displayed formula.
Worked example
Follow one calculation.
- Income attributable to the equity measured
- 18000
- Beginning equity
- 80000
- Ending equity
- 100000
- Calculated result
- 20%
Load this example in the interactive form to inspect the intermediate amounts.
Assumptions and interpretation
For common-shareholder ROE, adjust income and equity consistently for preferred interests. Leverage can increase ROE and risk.
The output is a model based on the figures entered. Check source records and use the accounting or contractual definitions relevant to your task before relying on a result.
Questions about this tool
What does the return on equity calculation measure?
Relate owners’ income to the average corresponding equity base. The numerator and denominator should refer to the same ownership interest.
Which assumptions can change the result?
For common-shareholder ROE, adjust income and equity consistently for preferred interests. Leverage can increase ROE and risk.
Why can displayed totals differ slightly from my spreadsheet?
Calculations use the unrounded input values. Only the display is rounded. Use four or six decimal places to inspect small differences, and check the timing, sign conventions and rounding policy in your spreadsheet.
Reference and further learning
Financial accounting reference. These original learning examples apply the displayed formula; the reference does not certify or endorse this calculator.
Look up an accounting term · Practise with accounting questions
Formula and worked example checked 4 November 2026. Calculations run in your browser without sending the entered figures to Accounting Share. Report a calculation issue with the tool name, example inputs and expected result; avoid sharing confidential records.
