Valuation literacy · Homework calculator
ROE from PAT and equity
Same ROE homework as the metrics guide. Periods must match.
Score guide
Plain-English read on your result
You type rates
Fees & tax - not frozen in code
Educational only
Not a broker ticket or FBR filing
Formula
ROE % ≈ PAT ÷ equity × 100, when equity > 0.
Classroom: PAT 10, equity 50 (same unit)
ROE ≈ 20% if PAT and equity are the same period and unit. Thin equity can inflate ROE.
Result
HomeworkFill the fields on the left to see classroom math and a plain-English read of your number.
Understand your number
Profit compared with owners’ equity - how hard the business worked the owners’ money.
Typical homework range: Mature PSX banks often homework ~12%-25%. Industrials vary.
Score guide
| Range | Label | What it means for you |
|---|---|---|
| Under ~8% | Low ROE band | Weak return on equity - could be low profit, big equity base, or one bad year. |
| ~8%-15% | Adequate band | Middle homework zone - compare same sector peers. |
| ~15%-25% | Strong band | Healthy label on stored books - check if debt is doing the work (DuPont homework). |
| Over ~30% | Very high | Verify equity base and one-offs - can be distorted by small equity or spikes. |
- Under ~8% - Weak return on equity - could be low profit, big equity base, or one bad year.
- ~8%-15% - Middle homework zone - compare same sector peers.
- ~15%-25% - Healthy label on stored books - check if debt is doing the work (DuPont homework).
- Over ~30% - Verify equity base and one-offs - can be distorted by small equity or spikes.
High ROE with high debt is different from high ROE with clean books.
Related with these numbers: P/E from price and EPS · Implied print from P/E × EPS · P/B from price and book value · Dividend yield from DPS and price
Thin equity or one-offs can inflate ROE. Not a buy signal.
FAQ
Is the result a buy or sell signal?
No. It is classroom arithmetic. Compare with filings and a licensed broker before any real order.
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