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Return on Equity using Shareholder's Equity 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 = (\frac{NI}{E avg}) \cdot 100

ROE - Return on Equity?NI - Net Income?E_avg - Average Shareholders' Equity?

Return on Equity using Shareholder's Equity Example

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Here is how the Return on Equity using Shareholder's Equity equation looks like with Values.

Here is how the Return on Equity using Shareholder's Equity equation looks like with Units.

Here is how the Return on Equity using Shareholder's Equity equation looks like.

499.9875 = (\frac{200000}{40001}) \cdot 100

499.9875 = (\frac{200000}{40001}) \cdot 100

499.9875 = (\frac{200000}{40001}) \cdot 100

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Return on Equity using Shareholder's Equity Solution

Follow our step by step solution on how to calculate Return on Equity using Shareholder's Equity?

FIRST Step Consider the formula

ROE = (\frac{NI}{E avg}) \cdot 100

Next Step Substitute values of Variables

∴

ROE = (\frac{200000}{40001}) \cdot 100

Next Step Prepare to Evaluate

∴

ROE = (\frac{200000}{40001}) \cdot 100

Next Step Evaluate

∴

ROE = 499.987500312492

LAST Step Rounding Answer

∴

ROE = 499.9875

Return on Equity using Shareholder's Equity 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 can be positive or negative.

Formulas to find Return on Equity

Net Income

Net income is a company's total earnings.

Symbol: NI

Measurement: NAUnit: Unitless

Note: Value can be positive or negative.

Formulas to find Net Income

Average Shareholders' Equity

Average Shareholders' Equity refers to the sum of the beginning and end value of owners' equity, divided by 2. The value of shareholders' equity is available on the balance sheet reported yearly.

Symbol: E_avg

Measurement: NAUnit: Unitless

Note: Value should be greater than 0.

Formulas to find Average Shareholders' Equity

Other formulas in Performance Ratio category

Go Cash Flow to Sales

CFS = \frac{OCF}{S}

Go Cash to Net Income ratio

CFI = \frac{OCF}{NI}

Go Cash Return on Assets

ROA c = \frac{OCF}{TAA}

Go Cash Flow per Share

CF Share = \frac{OCF - PD}{CSO total}

How to Evaluate Return on Equity using Shareholder's Equity?

Return on Equity using Shareholder's Equity evaluator uses Return on Equity = (Net Income/Average Shareholders' Equity)*100 to evaluate the Return on Equity, The Return on Equity using Shareholder's Equity formula is a financial ratio that shows how well a company is managing the capital that shareholders have invested in it. To calculate ROE, one would divide net income by shareholder equity. Return on Equity is denoted by ROE symbol.

How to evaluate Return on Equity using Shareholder's Equity using this online evaluator? To use this online evaluator for Return on Equity using Shareholder's Equity, enter Net Income (NI) & Average Shareholders' Equity (E_avg) and hit the calculate button.

FAQs on Return on Equity using Shareholder's Equity

What is the formula to find Return on Equity using Shareholder's Equity?

The formula of Return on Equity using Shareholder's Equity is expressed as Return on Equity = (Net Income/Average Shareholders' Equity)*100. Here is an example- 499.9875 = (200000/40001)*100.

How to calculate Return on Equity using Shareholder's Equity?

With Net Income (NI) & Average Shareholders' Equity (E_avg) we can find Return on Equity using Shareholder's Equity using the formula - Return on Equity = (Net Income/Average Shareholders' Equity)*100.

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Return on Equity using Shareholder's Equity Formula

Return on Equity using Shareholder's Equity Example

Return on Equity using Shareholder's Equity Solution

Return on Equity using Shareholder's Equity Formula Elements

Other formulas in Performance Ratio category

How to Evaluate Return on Equity using Shareholder's Equity?

FAQs on Return on Equity using Shareholder's Equity

Variable Name