ROE and ROIC calculator
What a business earns on its capital: on equity alone, and on equity plus debt.
Fill it from a company
Illustrative inputs
Bottom line of the income statement, attributable to the parent.
Earnings before interest and tax, from the income statement.
Income tax expense. With pre-tax income it sets the tax rate.
The line above the tax charge. If either tax line is unusable, 21% is used.
Interest-bearing debt, short and long term, from the balance sheet.
Cash and equivalents. Subtracted from invested capital.
ROE
15.00%
p75 to p90At or above p75 (12.82%), below p90 (25.45%).
ROIC
13.13%
p50 to p75At or above p50 (7.11%), below p75 (14.02%).
ROE less ROIC
1.87 pts
ROE is after interest; ROIC is before it.
Debt to equity
At or above p25 (0.16), below p50 (0.57).
Measured among US companies: 4,574 for ROE, 1,530 for ROIC and 2,320 for debt to equity, built 2026-10-21.
Show the working
| Step | Value |
|---|---|
| Net income | 120 |
| Divided by equity | 800 |
| Return on equity | 15.00% |
| Step | Value |
|---|---|
| Tax rate, tax over pre-tax income | 24.00% |
| Operating income after tax | 144.4 |
| Invested capital, equity + debt - cash | 1,100 |
| Return on invested capital | 13.13% |
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How it works
ROE = net income / equity
ROIC = operating income x (1 - tax rate) / (equity + debt - cash)
- Tax rate = income tax / pre-tax income, or 21% if either line is unusable.
- Negative equity gives n/m: the ratio would describe buybacks, not returns.
- All seven inputs are lines in an annual report.
Reading the result
Under each return, ticks mark its cohort from p05 to p95 and the bracket shows where your figure falls among US filers. The label names the pair it falls between.
Set the example's equity to -200: plain division gives -60.00%, the page prints n/m, and ROIC still reads 144.40%.
Questions
Why n/m for negative equity?
A profitable company can carry negative equity after years of buybacks. Its profit divided by that equity gives a large negative ROE that describes the buybacks, not the business, so the page prints n/m.
Why do ROE and ROIC differ?
ROE is measured after interest, on equity alone. ROIC is measured before interest, on equity plus debt less cash. Debt usually opens the gap; a large cash balance can too.
Where do the cohort marks come from?
From the published distribution for each metric: US companies with filed statements, one row per company, with the cohort size and build date printed beside the marks.
Does it work for banks?
Not well. A bank's balance sheet does not separate operating capital from funding, so invested capital, and the ROIC built on it, lose their meaning.
What this leaves out
- One year is a thin sample: a single write-down moves both ratios.
- Book values understate capital built through expensed research and brands.
- A return means little until it is set against the cost of capital.
Next step
Three numbers drafted from that company’s own filed figures, with the year each last broke. No account, and nothing is saved until you say so.
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