      # Return on Equity Ratio Calculator

Key in the Net Income Values from your Income Statement and Total Shareholders Equity Value from your Balance Sheet to the respective fields given below and then click Calculate to get the desired result.

##### Return on Equity Ratio Calculator - Glossary:
Using our return on equity ratio calculator, helps to compare, measure, understand the overall health of the business.

##### Return on Equity:
Shows the proportion of net income to its total shareholder’s equity. In simple words, it is used to measure the company's ability to generate profits from its shareholders investments.

##### How to calculate?
Formula: Return on Equity (ROE) = Net Income / Shareholder's Equity
The values for net income can be obtained from income statement and total shareholder's equity value from the balance sheet.

##### Net Income:
Profit left over after deducting all its expenses (cost of goods, operational expenses, interest cost, depreciation cost, taxes and if any dividend paid).

##### Total Shareholder's Equity:
Total shareholder's equity is the value left in the company after subtracting total liabilities from total assets.

##### Example:
Return on equity ratio for a company with net income of \$60,000 and total shareholder’s equity of \$400,000 is 15%. It means that, \$0.15 of return earned on the shareholder's equity.

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