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8.11 Return on Equity Analysis Template

Why do we need a template for the Return on Equity Ratio in a small business plan for a Electrical Contractor?

The Return on Equity Ratio template gives a small business owner like Andy Powell the ability to present the readers of the business plan in a very clear numerical and graphical format, what the Return on Equity is projected to look like for the three years for which financial statements are being projected in the business plan.

The Return on Equity Ratio measures the ability of a small business like Lights On Electrical, Inc. to be able to generate bottom line Income (Net Income) for its shareholders and is a key ratio that is looked at by lenders and especially potential partners when they are looking to either lend money to the business in the form of a business loan or make an investment into the business.

What calculations go into the Return on Equity Ratio template for a small business like Lights On Electrical, Inc.?

There are only two inputs that have to be entered into the Input section of the Equity Ratio Template - one is the Net Income for the business and the second is of course the Total Equity which is arrived at by taking the Total Assets and subtracting the Total Liabilities from them - also known as total capital or shareholders equity. Once these two inputs are entered in, our template will do the rest by calculating the ratio for the three years being projected in the business plan. You can click on the output tab and copy and paste the output directly into the business plan word document.

Quick Links:

  1. Go to the Corresponding Questionnaire section for this industry.
  2. Go to the Corresponding Business Plan section for this industry.

Small Business Owner Resource Center


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