How to use this calculator
- Enter net income, revenue, average total assets, average positive equity.
- Choose a display currency, then select Calculate. Results also update after a brief pause while you edit.
- Read the result with the assumptions below. Export details or save a second scenario to compare your choices.
Formula and method
Assumptions and limitations
Use matched periods and average balance-sheet values. It does not establish causation or future profitability.
Worked example
With net income = 20000, revenue = 200000, average total assets = 250000, average positive equity = 100000, return on equity is approximately 20%.
What the result means
The decomposition separates operating profitability, asset use and leverage rather than explaining ROE with one number.
Common questions
How should I interpret return on equity?
The decomposition separates operating profitability, asset use and leverage rather than explaining ROE with one number.
What should I check before using this result?
Use matched periods and average balance-sheet values. It does not establish causation or future profitability.
Methodology and transparency
Calculation specification reviewed on 2026-10-14. Mathematical implementation is tested against independent reference fixtures. This does not imply review by a licensed financial professional. Read the testing and precision policy.