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Return on Equity given Operating Profit Formula

GoReturn on Equity given Net Income Formula

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Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity. Check FAQs

ROE = (OPM \cdot ATO) - (IER \cdot EM \cdot TR)

ROE - Return on Equity?OPM - Operating Profit Margin?ATO - Asset Turnover?IER - Interest Expense Rate?EM - Equity Multiplier?TR - Tax Retention?

Return on Equity given Operating Profit Example

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Here is how the Return on Equity given Operating Profit equation looks like with Values.

Here is how the Return on Equity given Operating Profit equation looks like with Units.

Here is how the Return on Equity given Operating Profit equation looks like.

20 = (15 \cdot 6) - (5 \cdot 2 \cdot 7)

20 = (15 \cdot 6) - (5 \cdot 2 \cdot 7)

20 = (15 \cdot 6) - (5 \cdot 2 \cdot 7)

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Return on Equity given Operating Profit Solution

Follow our step by step solution on how to calculate Return on Equity given Operating Profit?

FIRST Step Consider the formula

ROE = (OPM \cdot ATO) - (IER \cdot EM \cdot TR)

Next Step Substitute values of Variables

∴

ROE = (15 \cdot 6) - (5 \cdot 2 \cdot 7)

Next Step Prepare to Evaluate

∴

ROE = (15 \cdot 6) - (5 \cdot 2 \cdot 7)

LAST Step Evaluate

∴

ROE = 20

Return on Equity given Operating Profit Formula Elements

Variables

Return on Equity

Return on Equity (ROE) is a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity.

Symbol: ROE

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Return on Equity

Operating Profit Margin

The Operating Profit Margin is a margin ratio used to measure a company's pricing strategy and operating efficiency.

Symbol: OPM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Operating Profit Margin

Asset Turnover

Asset Turnover is a financial ratio that measures the efficiency of a company's use of its assets in generating sales revenue or sales income to the company.

Symbol: ATO

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Asset Turnover

Interest Expense Rate

Interest Expense Rate is the rate of the non-operating expense shown on the income statement.

Symbol: IER

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Interest Expense Rate

Equity Multiplier

The Equity Multiplier is a financial leverage ratio that measures the amount of a firm's assets that are financed by its shareholders by comparing total assets with total shareholder's equity.

Symbol: EM

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Equity Multiplier

Tax Retention

Tax Retention is the mandatory tax placed on income that is earned on investments in a country that is not the resident's home country.

Symbol: TR

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Tax Retention

Other Formulas to find Return on Equity

Go Return on Equity given Net Income

ROE = \frac{NI}{TE}

How to Evaluate Return on Equity given Operating Profit?

Return on Equity given Operating Profit evaluator uses Return on Equity = (Operating Profit Margin*Asset Turnover)-(Interest Expense Rate*Equity Multiplier*Tax Retention) to evaluate the Return on Equity, Return on Equity given Operating Profit can be defined as a measure of profitability that calculates how many dollars of profit a company generates with each dollar of shareholders' equity when operating profit is given. Return on Equity is denoted by ROE symbol.

How to evaluate Return on Equity given Operating Profit using this online evaluator? To use this online evaluator for Return on Equity given Operating Profit, enter Operating Profit Margin (OPM), Asset Turnover (ATO), Interest Expense Rate (IER), Equity Multiplier (EM) & Tax Retention (TR) and hit the calculate button.

FAQs on Return on Equity given Operating Profit

What is the formula to find Return on Equity given Operating Profit?

The formula of Return on Equity given Operating Profit is expressed as Return on Equity = (Operating Profit Margin*Asset Turnover)-(Interest Expense Rate*Equity Multiplier*Tax Retention). Here is an example- 20 = (15*6)-(5*2*7).

How to calculate Return on Equity given Operating Profit?

With Operating Profit Margin (OPM), Asset Turnover (ATO), Interest Expense Rate (IER), Equity Multiplier (EM) & Tax Retention (TR) we can find Return on Equity given Operating Profit using the formula - Return on Equity = (Operating Profit Margin*Asset Turnover)-(Interest Expense Rate*Equity Multiplier*Tax Retention).

What are the other ways to Calculate Return on Equity?

Here are the different ways to Calculate Return on Equity-

Return on Equity=Net Income/Total Equity

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Return on Equity given Operating Profit Formula

​GoReturn on Equity given Net Income Formula

Return on Equity given Operating Profit Example

Return on Equity given Operating Profit Solution

Return on Equity given Operating Profit Formula Elements

Other Formulas to find Return on Equity

How to Evaluate Return on Equity given Operating Profit?

FAQs on Return on Equity given Operating Profit

Variable Name

GoReturn on Equity given Net Income Formula