Return on equity (ROE) formula

Tags: corporate finance financial analysis metric

Description of the Return on equity (ROE) formula

Formula for the calculation of the return on equity (ROE).

Formula

\[ \text{ROE} = \frac {\text{Net Income}} {\text{Book value of Equity}} \ \]

Additional information related to this formula

Related financial formulas

Return on assets (ROA) • Return on capital employed (ROCE)