Return on equity (ROE)
Return on equity relates the year's profit to the funds contributed and retained by the shareholders.
Formula
The codes are those of the National Bank of Belgium's annual-accounts formats; they are the ones Idonis uses for every company profile.
How to read it
A high ROE can come from a very profitable business, or from thin equity: always read it with solvency.
A negative ROE signals a loss for the year; with negative equity the ratio is meaningless and is not calculated.
It varies a lot from year to year for small companies: look at the trend over several years.
Return on equity (ROE): medians of the main Belgian sectors
Computed by IdonisFor financial year 2024, in the sectors with the most companies: a quarter of companies below the 1st quartile, half below the median, three quarters below the 3rd quartile.
| Sector | 1st quartile | Median | 3rd quartile | Companies |
|---|---|---|---|---|
| Activities of head offices and management consultancy | 4.1% | 21.3% | 54.8% | 45,995 |
| Specialised construction activities | 2.5% | 15.2% | 37.6% | 42,824 |
| Real estate activities | -2.7% | 3.5% | 17.4% | 40,578 |
| Human health activities | 16.1% | 31.4% | 71.8% | 38,383 |
| Retail trade | 1.2% | 12.5% | 31.2% | 34,664 |
| Wholesale trade | 0.3% | 9.4% | 25.7% | 29,255 |
| Computer programming, consultancy and related activities | 8.3% | 26.9% | 62.5% | 23,506 |
| Financial service activities, except insurance and pension funding | 0.4% | 9.8% | 32.6% | 23,170 |
| Legal and accounting activities | 11.0% | 28.3% | 67.3% | 19,772 |
| Food and beverage service activities | 1.6% | 18.5% | 46.5% | 17,696 |
Medians computed by Idonis from annual accounts filed with the National Bank, all sizes combined. The same panel is the sector benchmark on every company page. Belgian companies by sector →
Frequently asked questions
How do I calculate return on equity?
Divide the profit for the year (code 9904) by equity (code 10/15). €50,000 of profit on €250,000 of equity gives 20%.
What is a good ROE?
It depends on the sector and on the level of equity. The table on this page gives the median of the main Belgian sectors.
What is the difference between ROE and ROA?
ROA relates the result to total assets, ROE to equity only. The gap between the two reflects indebtedness.