Return On Equity Calculator is used to calculate the Return of Equity (ROE) from the net income

- Return On Equity:
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- What does Return on Equity mean?
- The Return On Equity ratio measures, the rate of return that the owners of common stock of a company receive on their shareholdings. Return on equity or ROE signifies the how well a company is in the generation of returns on the investment it receives from its shareholders.

- Importance of Return on Equity
- Return on equity is the measure corporation's profitability, making it important. It reveals how much profit a company generates with the money shareholders have invested.

- Formula
- Return on Equity = Net Income after Tax / Shareholder's Equity

- Example
- If your net income after tax is 1000 and the shareholder's equity is 2500. The return on equity is 100 * 1000 / 2500 = 40%