Investik Future - ROE Calculator

ROE CALCULATOR

Free Online Return on Equity (ROE) Calculator
Live Calculator

Calculate Return on Equity (ROE) instantly to evaluate how efficiently a company generates profit using shareholders' equity.

Company Financials
Net Profit (₹ Cr) ₹500 Cr
₹
ℹ️ Net profit after tax from the income statement (in ₹ Crore)
Shareholders' Equity (₹ Cr) ₹2,500 Cr
₹
ℹ️ Total equity from balance sheet (paid-up capital + reserves)
Total Revenue (₹ Cr) ₹5,000 Cr
₹
ℹ️ Total revenue / net sales from the income statement
Total Assets (₹ Cr) ₹8,000 Cr
₹
ℹ️ Total assets from balance sheet (used for DuPont analysis)
Equity Utilisation
0%
ROE
Equity
Net Profit
ROE & DuPont Summary
Net Profit Margin
0%
Asset Turnover Ratio
0x
Equity Multiplier
0x
Basic ROE (Net Profit / Equity)
0%
DuPont ROE
0%
📊 Enter financials to evaluate ROE quality
ROE vs Net Profit Margin - Scenario Analysis
Basic ROE % DuPont ROE %
Net Profit Margin Scenario Breakdown
Net Margin %Net Profit (₹ Cr)Basic ROE %Asset TurnoverDuPont ROE %
📚 ROE Knowledge Hub
Master Return on Equity - the metric Warren Buffett swears by!

📈 What is Return on Equity (ROE)?

ROE measures how much net profit a company generates for every rupee of shareholders' equity. It answers: "How efficiently is management using investors' money?" A consistently high ROE (15%+) over many years is one of the strongest indicators of a great business with competitive advantages. Warren Buffett specifically looks for companies with ROE above 15% for 10+ consecutive years. 🏆

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Basic Formula
Net Profit / Equity
ROE = Net Profit ÷ Shareholders' Equity × 100. Simple, powerful, and the starting point for every fundamental analyst.
🎯
Benchmark ROE
15%+ is Good
ROE above 15% is generally considered strong. Above 20% is excellent. Below 10% needs further investigation for the industry context.
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DuPont Analysis
3 Drivers
DuPont breaks ROE into: Net Profit Margin × Asset Turnover × Equity Multiplier. Each driver tells a different story about the business.
⚠️
High Debt Warning
Check Equity Multiplier
A high ROE from a very high Equity Multiplier (3x+) may be driven by debt, not operational excellence. Always check the DuPont breakdown.
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Consistency Matters
10-year trend
One year of high ROE is noise. 10 years of 20%+ ROE is signal - it indicates a durable competitive advantage or economic moat.
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Industry Context
Compare peers
ROE benchmarks differ by sector. Banks, FMCG, and IT companies can have very different natural ROE ranges. Always compare within the industry.
DuPont
3-Factor Model

🔬 DuPont Analysis - Decompose Your ROE!

The DuPont formula breaks ROE into three levers: Profitability × Efficiency × Leverage. This reveals why a company has a certain ROE - whether it's from strong margins, efficient asset use, or financial leverage. Two companies can have the same ROE but very different risk profiles.

📊 NPM = Net Profit ÷ Revenue 🔄 AT = Revenue ÷ Total Assets 🏦 EM = Total Assets ÷ Equity
💡 Smart ROE Analysis Tips
📅
Always look at 5–10 year ROE trend - A single year's ROE can be distorted by one-time items. Consistent high ROE over a decade is the hallmark of a great business.
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Use DuPont to identify the source - High ROE from high margins (IT, FMCG) is superior to high ROE from high leverage (banks, NBFCs). Dig into the driver.
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Compare with industry peers - A 12% ROE in capital-intensive steel industry may be excellent, while 12% in an asset-light software company may indicate underperformance.
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Watch for buybacks inflating ROE - Share buybacks reduce equity, which mechanically raises ROE without improving operations. Always check if equity is shrinking.
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Pair ROE with ROCE - ROE measures return on equity; ROCE measures return on total capital employed. Together they give a complete picture of capital efficiency.
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High ROE + Low Debt = Moat - A company that consistently generates 20%+ ROE with minimal debt has a genuine competitive advantage. That's the sweet spot for long-term investors.
Investik Future  ·  ROE Calculator  ·  For educational purposes only  ·  Not investment advice