Return on Equity using Shareholder's Equity Calculator

✖Net income is a company's total earnings.ⓘ Net Income [NI]			+10% -10%
✖Average Shareholders' Equity refers to the sum of the beginning and end value of owners' equity, divided by 2. The value of shareholders' equity is available on the balance sheet reported yearly.ⓘ Average Shareholders' Equity [E_avg]			+10% -10%

✖Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity.ⓘ Return on Equity using Shareholder's Equity [ROE]

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Formula

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Return on Equity using Shareholder's Equity

Formula

`"ROE" = ("NI"/"E"_{"avg"})*100`

Example

`"499.9875"=("200000"/"40001")*100`

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Return on Equity using Shareholder's Equity Solution

STEP 0: Pre-Calculation Summary

Formula Used

Return on Equity = (Net Income/Average Shareholders' Equity)*100
ROE = (NI/E_avg)*100
This formula uses 3 Variables

Variables Used

Return on Equity - Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity.
Net Income - Net income is a company's total earnings.
Average Shareholders' Equity - Average Shareholders' Equity refers to the sum of the beginning and end value of owners' equity, divided by 2. The value of shareholders' equity is available on the balance sheet reported yearly.

STEP 1: Convert Input(s) to Base Unit

Net Income: 200000 --> No Conversion Required
Average Shareholders' Equity: 40001 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ROE = (NI/E_avg)*100 --> (200000/40001)*100

Evaluating ... ...

ROE = 499.987500312492

STEP 3: Convert Result to Output's Unit

499.987500312492 --> No Conversion Required

FINAL ANSWER

499.987500312492 ≈ 499.9875 <-- Return on Equity

(Calculation completed in 00.004 seconds)

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Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has created this Calculator and 50+ more calculators!

Verified by Vishnu K

BMS College of Engineering (BMSCE), Bangalore

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< 9 Performance Ratio Calculators

Economic Value Added

Go Economic Value Added = Net Operating Profit After Tax-Weighted Average Cost of Capital*Total Invested Capital

Cash Flow per Share

Go Cash Flow per Share = (Operating Cash Flow-Preferred Dividends)/Total Common Shares Outstanding

Enterprise Value

Go Enterprise Value = Market Capitalization+Total Debt of Company-Cash and Cash Equivalents

Market Capitalization

Go Market Capitalization = Current Share Price*Total Shares Outstanding

Market to Book Ratio

Go Market to Book value = Market Capitalization/Book Value of Equity

Return on Equity using Shareholder's Equity

Go Return on Equity = (Net Income/Average Shareholders' Equity)*100

Cash Return on Assets

Go Cash Return on Assets = Operating Cash Flow/Total Average Assets

Cash to Net Income ratio

Go Cash Flow to Income = Operating Cash Flow/Net Income

Cash Flow to Sales

Go Cash Flow to Sales = Operating Cash Flow/Sales

Return on Equity using Shareholder's Equity Formula

Return on Equity = (Net Income/Average Shareholders' Equity)*100
ROE = (NI/E_avg)*100

What is Return on Equity (ROE)?

Return on equity (ROE) is a measure of financial performance calculated by dividing net income by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its debt, ROE is considered the return on net assets.
ROE is considered a gauge of a corporation's profitability and how efficient it is in generating profits. The higher the ROE, the more efficient a company's management is at generating income and growth from its equity financing.

How to Calculate Return on Equity using Shareholder's Equity?

Return on Equity using Shareholder's Equity calculator uses Return on Equity = (Net Income/Average Shareholders' Equity)*100 to calculate the Return on Equity, The Return on Equity using Shareholder's Equity formula is a financial ratio that shows how well a company is managing the capital that shareholders have invested in it. To calculate ROE, one would divide net income by shareholder equity. Return on Equity is denoted by ROE symbol.

How to calculate Return on Equity using Shareholder's Equity using this online calculator? To use this online calculator for Return on Equity using Shareholder's Equity, enter Net Income (NI) & Average Shareholders' Equity (E_avg) and hit the calculate button. Here is how the Return on Equity using Shareholder's Equity calculation can be explained with given input values -> 499.9875 = (200000/40001)*100.

FAQ

What is Return on Equity using Shareholder's Equity?

The Return on Equity using Shareholder's Equity formula is a financial ratio that shows how well a company is managing the capital that shareholders have invested in it. To calculate ROE, one would divide net income by shareholder equity and is represented as ROE = (NI/E_avg)*100 or Return on Equity = (Net Income/Average Shareholders' Equity)*100. Net income is a company's total earnings & Average Shareholders' Equity refers to the sum of the beginning and end value of owners' equity, divided by 2. The value of shareholders' equity is available on the balance sheet reported yearly.

How to calculate Return on Equity using Shareholder's Equity?

The Return on Equity using Shareholder's Equity formula is a financial ratio that shows how well a company is managing the capital that shareholders have invested in it. To calculate ROE, one would divide net income by shareholder equity is calculated using Return on Equity = (Net Income/Average Shareholders' Equity)*100. To calculate Return on Equity using Shareholder's Equity, you need Net Income (NI) & Average Shareholders' Equity (E_avg). With our tool, you need to enter the respective value for Net Income & Average Shareholders' Equity and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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