grepcent / static financial knowledge base

Informational only - not investment advice.

Reading Financial Data - Step by Step / Cash flow & returns

What is ROE?

ROE compares net income with stockholders' equity.

As of: 2025-10-31.

Concept

ROE = net income / equity. Always read the denominator before comparing the percentage.

Worked Example: Compute Apple return on equity

  1. AAPL net income was $112.0 billion in fiscal 2025.
  2. AAPL stockholders' equity was $73.7 billion.
  3. ROE = net income / equity = $112.0 billion / $73.7 billion = 151.91%.
  4. Apple's equity is much smaller than its assets, partly because share repurchases reduce equity.
  5. That smaller denominator can make ROE very high. ROE is a context-dependent ratio, not a standalone verdict.

See it live

Sources

Informational only - not investment advice.