Return on equity (ROE) calculator

How to use it

Enter your figures above — the result updates instantly and nothing leaves your browser. Results are illustrative, not a quote or credit decision.

How to interpret the result

A return on equity figure only means something alongside context. Compare it against how the company has performed in previous periods, rather than treating a single calculation as a verdict — a lender or accountant reviewing your numbers will usually want to see a trend, not a snapshot. It also helps to look at ROE next to profit margins and asset turnover, since the same headline return can come from very different underlying operations.

Two companies with an identical result can be in very different positions. One might be generating that return from strong trading performance and modest borrowing, while another might be leaning heavily on debt to inflate the figure. Reading ROE in isolation risks missing which of these stories applies to your own limited company.

Limitations and good practice

This calculator works from the figures you enter, so its usefulness depends on the quality of your underlying accounts. Net profit after tax can be affected by one-off items — an unusual gain or an exceptional cost — which can distort the return for a single year without reflecting how the business normally performs. Where possible, it is good practice to sense-check the result against a run of prior-year figures rather than relying on one period alone.

The result also says nothing on its own about how sustainable that return is, or how it was funded. Pairing this calculator with the gearing ratio gives a fuller picture of whether the return reflects genuine trading strength or reliance on borrowing, and reviewing it alongside the return on assets figure can help separate operating performance from the effect of financing decisions.