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 = ?