How it works
ROE = net income / average opening and closing equity × 100. Average equity must be positive.
Input definitions
- Net income attributable to equity
- Enter the value in the labeled unit.
- Opening equity
- Enter the value in the labeled unit.
- Closing equity
- Enter the value in the labeled unit.
A worked example
- Net income attributable to equity
- 15000
- Opening equity
- 90000
- Closing equity
- 110000
Assumptions & limits
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.
Sources & review
Maintained by AnsRio. Methods and examples use automated checks; this does not imply independent professional certification.
Method updated 2026-10-18. Content checked against the stated method and examples. Our verification approach.
Common questions
How is negative equity treated?
The tool rejects a nonpositive average equity denominator because the usual percentage interpretation becomes misleading.
How does Return on average equity work?
ROE = net income / average opening and closing equity × 100. Average equity must be positive.
What should I check before using Return on average equity?
Uses the accounting classifications, periods and policies you enter. Illustrative management-accounting model; it is not an audited statement, filing or determination of local accounting or tax compliance.