Free tool
DuPont analysis calculator
See why return on equity is high or low. Enter net income, sales, average assets and average equity.
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How it works
How it works
ROE = net profit margin x asset turnover x equity multiplier. Margin shows profit on each sale, turnover shows how hard assets work, and the multiplier shows how much of the business is financed by debt instead of equity.
FAQ
About this calculator
Why break ROE into three parts?
Two businesses can earn the same ROE in different ways: high margins, fast turnover or heavy debt. The split shows which one is driving the result.
Is a high equity multiplier bad?
It means more debt relative to equity. That can raise ROE but also raises risk, so lenders look at it closely.
Where do I find the numbers?
Net income and sales are on the profit and loss. Assets and equity are on the balance sheet.
Is anything saved?
No. The math runs in your browser and nothing you enter is sent to us.
Is this tax or financial advice?
No. It is a calculator for general information. Check the numbers against your own records, and ask an accountant before you act on them.
Related: return on equity and assets calculator, debt to equity ratio calculator. See all free tools. More free tools: Early payment discount calculator, Debt-to-equity ratio calculator, Receivables turnover calculator, or see all free tools.
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General information, not tax or legal advice. How we write and check our tools.