Return on equity
Net income divided by book equity, as a percentage. It is a return on the residual claim after interest, not a return on the operating capital.
Because the numerator is after interest and the denominator is equity only, financial leverage sits inside ROE. Borrowing to shrink the equity slice can lift the rate without the operations earning more.
Return on invested capital is the operating cousin: NOPAT over invested capital. Compare ROE with the cost of equity, and ROIC with WACC, rather than mixing the pairs.
The ROE calculator runs the division. The pair is laid out on ROE against ROIC.