**Instructions:** You can use this Return on Equity Calculator \((ROE)\), by providing the Net Income and the current total equity in the form below:

## Return on Equity Calculator

More about the *Return on Equity* so you can better use the results provided by this solver. The Return on Equity \((ROE)\) is the ratio of net income to total equity. This ratio is a profitability measure, and it indicates how many dollars in net income a firm has for each $1 in total equity. In order to calculate the ROE, we use the following formula:

You can also consider other measures of profitability, such as the return on assets or profit margin.

One interesting approach to the calculation of the Return on Equity is the use of DuPont Identity, which breaks down the ROE calculation into three crucial factors.

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