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ROE/ROIC Analyzer
Core metrics for measuring company profitability
ROE measures shareholder capital efficiency, ROIC measures operating efficiency excluding leverage — one of Warren Buffett's favorite metrics.
ROE Calculation
Return on Equity = Net Income ÷ Shareholder's Equity
ROE
20.00%
Excellent 🏆
Sustained 5+ years indicates a wide moat
ROIC Calculation
Return on Invested Capital = NOPAT ÷ Invested Capital
ROIC
20.00%
Excellent 🏆
Exceeds most companies' capital efficiency
Invested Capital: 500
DuPont Analysis (ROE Decomposition)
Decompose ROE into three drivers to understand the true source of profitability
ROE = Profit Margin × Asset Turnover × Financial Leverage
0.20%
Profit Margin
10.00%
Profit per revenue yuan
Asset Turnover
1.25x
Revenue per asset yuan
Fin. Leverage
1.60x
Higher ≠ better, adds risk
💡 DuPont reveals: A high ROE isn't always good. If it's driven by high financial leverage (1.60x), the company carries more debt. Quality companies derive ROE from high margins + high turnover.
ROE/ROIC Reference Standards
ROE
🏆 Excellent>20%
✓ Good15-20%
→ Average10-15%
↓ Low<10%
ROIC
🏆 Excellent>15%
✓ Good10-15%
→ Average5-10%
↓ Low<5%
Important Note
ROE and ROIC are core profitability metrics but should not be used in isolation. High ROE may come from high leverage (risky), while high ROIC is more reliable. Combine with margin of safety and moat analysis. This tool is for reference only.