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Return on Equity — DuPont 3-Step Calculator

ROE = NPM · Asset Turnover · Equity Multiplier.

Decompose Return on Equity using the three-step DuPont identity: ROE = (Net Income / Sales) × (Sales / Total Assets) × (Total Assets / Total Equity) = Net Profit Margin × Asset Turnover × Equity Multiplier. Useful for diagnosing whether ROE is profitability-, efficiency-, or leverage-driven.

Nadia Almasri By Nadia Almasri
Published Last reviewed 1 min read

Inputs

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Results

Enter values and click Calculate to see results.
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How to use this calculator

  1. Fill in the inputs above using the units you already have.
  2. Values update automatically as you type — no submit button needed.
  3. Hover any result row for the underlying formula and intermediate values.

Formula

ROE = NPM · AT · EM.

In depth

Decompose Return on Equity using the three-step DuPont identity: ROE = (Net Income / Sales) × (Sales / Total Assets) × (Total Assets / Total Equity) = Net Profit Margin × Asset Turnover × Equity Multiplier. Useful for diagnosing whether ROE is profitability-, efficiency-, or leverage-driven.