In this lesson you can learn how to calculate ROE in Excel.
ROE stands for return on equity. Return of equity is one of the most basics measures in the business. ROE is a profitability indicator which is used to measure the efficiency of the company, regardless of the structure of its assets or extraordinary factors. Return of equity is helpful for investors to valuate the profit from their investment.
Let's build the return on equity calculator in Excel. To calculate ROE in Excel first you need some data. You need net profit and equity capital.
Copy and paste this roi formula in cell B4: =B2/B3
This formula will calculate the ROE for the data you place in cells B2 and B3 and is based on roe equation formula:
ROE = Net Profit / Equity Capital
Remember to format ROE as Percentage. Click B4 cell > click CTRL + 1 keyboard shortcut > click Percentage with 2 decimal places