New to this? Read the plain English guide first.
See how much profit a company makes from its owners money.
Return on equity shows how well a company turns owner money into profit. A higher number can mean a stronger business, but heavy debt can also push it up, so read it with debt in mind.
Return on equity = net income divided by shareholder equity, times 100.
Want the full story with a worked example? Read the Return on Equity guide, or see all of our free calculators. For learning only, not advice.