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Miraç Özdemir
Financial Ratio Analysis

Profitability Ratios Calculator (ROE, ROA, Net Margin, DuPont)

Calculates net profit margin, ROA, ROE, asset turnover and the equity multiplier from net profit, revenue, assets and equity, and breaks ROE down with DuPont.

Version 1

Things to keep in mind:

  • Equity must be positive; ROE is not meaningful with negative equity and the tool does not accept it.
  • Returns depend on the period length; quarterly figures are not annualised.
  • Inflation accounting and extraordinary items are not modelled separately.
  • For information only.

Calculator

Income statement

TRY

Net profit for the period (TRY). Enter a negative value for a loss.

TRY

Net sales for the period (TRY). Must be greater than zero.

Balance sheet

TRY

Total assets at period end (TRY).

TRY

Total equity at period end (TRY). Must be greater than zero.

TRY

Optional: when entered, average assets are used. Leave 0 to use the end-of-period value.

TRY

Optional: when entered, average equity is used. Leave 0 to use the end-of-period value.

After the first calculation, the result updates automatically when you change a value.

Result

Enter the values and press Calculate to see the result here.

About this tool

Profitability ratios show how efficiently a business uses its assets and capital. This calculator computes net profit margin, ROA, ROE, asset turnover and the equity multiplier, and splits ROE with a DuPont analysis into three drivers.

Formulas

  • Net profit margin (%) = Net profit / Net revenue × 100
  • Asset turnover = Net revenue / Assets
  • Equity multiplier = Assets / Equity
  • ROA (%) = Net profit / Assets × 100
  • ROE (%) = Net profit / Equity × 100
  • DuPont: ROE = Net margin × Asset turnover × Equity multiplier

If you also enter prior-period closing assets and equity, the average of opening and closing is used for that item; if you leave them at 0, the closing value is used. Results are rounded to 2 decimals, half up (HALF_UP). Net revenue, total assets and equity must be greater than zero.

Example 1: net profit 120,000, revenue 1,500,000, assets 1,000,000 and equity 400,000 give a margin of 8.00 %, turnover of 1.50, multiplier of 2.50, ROA of 12.00 % and ROE of 30.00 % (0.08 × 1.50 × 2.50 = 0.30).

Example 2 (with averages): adding prior-period assets of 800,000 and equity of 350,000 to the same data gives average assets of 900,000.00 and average equity of 375,000.00; turnover 1.67, multiplier 2.40, ROA 13.33 % and ROE 32.00 %.

Example 3 (loss): net profit −50,000, revenue 700,000, assets 600,000 and equity 250,000 give a margin of −7.14 %, ROA of −8.33 % and ROE of −20.00 %.

How to read the result: ROA relates profit to all assets, ROE only to equity; the more debt is used, the higher ROE is relative to ROA (the equity multiplier). The DuPont split shows where a high ROE comes from: margin, asset efficiency (turnover) or high leverage (multiplier). With a loss, margin, ROA and ROE are negative. Returns depend on the period length, so use annual figures for comparison. Suitable levels vary by industry. To see them alongside other ratios, you can also use the Financial Health Analysis tool.

How to use

  1. Enter net profit for the period (negative for a loss) and net revenue.
  2. Enter end-of-period total assets and equity.
  3. Optionally enter prior-period assets and equity to use averages.
  4. Press Calculate.

Notes

Percentages and amounts are rounded HALF_UP to 2 decimals. DuPont ROE uses unrounded components and equals ROE computed directly. Use annual figures for a comparable return.

Sources

Frequently asked questions

5 questions

  1. ROA relates profit to all assets, ROE only to equity. The more debt is used, the higher ROE is relative to ROA (the equity multiplier). For example, a 12 % ROA with a 2.50 multiplier gives an ROE of 30 %.

Next step

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