Close the Skill Gap -> Enroll to be a Certified Financial Modeling & Valuation Analyst (FMVA)® Today!

Return on Equity Template

Return on Equity Template

This return on equity template helps you calculate the ROE using the formula: ROE = Net Income / Shareholder’s Equity 

This is what the return on equity template looks like:

Return on Equity Template Screenshot

 

Download the Free Template

Enter your name and email in the form below and download the free template now!

Return on Equity Template

Download the free Excel template now to advance your finance knowledge!

 

Return on Equity (ROE) is a measure of a company’s annual return (net income) divided by the value of its total shareholders’ equity (i.e. 12%). Alternatively, ROE can also be derived by dividing the firm’s dividend growth rate by its earnings retention rate (or, 1 – dividend payout ratio).

Return on Equity is a two-part ratio that brings together the income statement and the balance sheet as the net income or profit is compared to the shareholders’ equity. The number represents the total return on equity capital and shows the firm’s ability to turn assets into profits. To put it another way, it measures the profits made for each dollar from shareholders’ equity.

A sustainable and increasing ROE over time can mean a company is good at generating shareholder returns because it knows how to reinvest its earnings in productive and high-quality assets. In contrast, a declining ROE means that management is making poor decisions on investing capital in unproductive assets.

 

More Free Templates

For more resources, check out our business templates library to download numerous free Excel modeling, PowerPoint presentation and Word document templates.

  • Excel Modeling Templates
  • PowerPoint Presentation Templates
  • Transaction Document Templates

Financial Analyst Certification

Become a certified Financial Modeling and Valuation Analyst (FMVA)® by completing CFI’s online financial modeling classes and training program!