Return on Equity (ROE) Calculator

Return on equity measures how well a company turns shareholder capital into profit, and this calculator goes a step further with DuPont decomposition to show what is actually driving the result. The headline figure alone can mislead; the real question is whether capital is being used efficiently. A hypothetical tech giant posting an average 20% ROE in 2026, for instance, is only impressive once you know how it stacks up against the broader market and how it got there.

DuPont Analysis splits ROE into three multiplicative parts: Net Profit Margin (Net Income/Sales), Asset Turnover (Sales/Average Total Assets), and Financial Leverage (Average Total Assets/Average Shareholder Equity). Multiplied together as ROE = NPM * AT * FL, they separate profitability, asset utilization, and the role of debt financing, so you can see which lever is doing the work.

A high ROE is not automatically a healthy one, because heavy financial leverage can inflate the number while quietly raising risk. The most useful comparisons are against a company's own history and its industry peers rather than a single market benchmark such as the S&P 500 average, projected around 14.5% for 2026. A steady decline in ROE is a warning worth heeding unless a credible turnaround is genuinely underway.