Enter the net earnings ($) and the total equity ($) into the Return on Earnings Calculator. The calculator will evaluate and display the Return on Earnings.
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Return on Earnings Formula
The following formula is used to calculate the Return on Earnings.
ROEA = NE / TE * 100
- Where ROEA is the Return on Earnings (%)
- NE is the net earnings ($)
- TE is the total equity ($)
How to Calculate Return on Earnings?
The following example problems outline how to calculate Return on Earnings.
Example Problem #1:
- First, determine the net earnings ($).
- The net earnings ($) is given as: 57,000.
- Next, determine the total equity ($).
- The total equity ($) is provided as: 300,000.
- Finally, calculate the Return on Earnings using the equation above:
ROEA = NE / TE * 100
The values given above are inserted into the equation below and the solution is calculated:
ROEA = 57,000 / 300,000 * 100 = 19.00 (%)
Example Problem #2:
For this problem, the variables needed are provided below:
net earnings ($) = 5,000
total equity ($) = 82,000
This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer.
ROEA = NE / TE * 100 = ?
