Enter the company’s net income ($) and the value of risk-weighted assets ($) into the Return on Risk-Adjusted Capital Calculator. The calculator will evaluate and display the Return on Risk-Adjusted Capital. 

Return on Risk-Adjusted Capital Formula

The following formula is used to calculate the Return on Risk-Adjusted Capital. 

RORAC = NI / RA * 100

  • Where RORAC is the Return on Risk-Adjusted Capital (%)
  • NI is the company’s net income ($) 
  • RA is the value of risk-weighted assets ($) 

How to Calculate Return on Risk-Adjusted Capital?

The following example problems outline how to calculate Return on Risk-Adjusted Capital.

Example Problem #1:

  1. First, determine the company’s net income ($). 
    • The company’s net income ($) is given as: 1780.
  2. Next, determine the value of risk-weighted assets ($). 
    • The value of risk-weighted assets ($) is provided as: 15,000.
  3. Finally, calculate the Return on Risk-Adjusted Capital using the equation above: 

RORAC = NI / RA * 100

The values given above are inserted into the equation below and the solution is calculated:

RORAC = 1780 / 15,000 * 100 = 11.866 (%)


Example Problem #2: 

For this problem, the variables needed are provided below:

company’s net income ($) = 700

value of risk-weighted assets ($) = 20,000

This example problem is a test of your knowledge on the subject. Use the calculator above to check your answer. 

RORAC = NI / RA * 100 = ?