What is 'Return On Average Equity  ROAE'
Return on average equity (ROAE) is an adjusted version of the return on equity (ROE) measure of company profitability, in which the denominator, shareholders' equity, is changed to average shareholders' equity. Typically, return on average equity refers to a company's performance over a fiscal year, so the averageequity denominator is usually computed as the sum of the equity value at the beginning and end of the year, divided by two.
BREAKING DOWN 'Return On Average Equity  ROAE'
A measure of return on average equity can give a more accurate depiction of a company's corporate profitability, especially in instances where the value of the shareholders' equity has changed considerably during a fiscal year. In situations where the shareholders' equity does not change or changes by very little during a fiscal year, the ROE and ROAE numbers should be identical, or at least similar.

Return On Equity  ROE
The amount of net income returned as a percentage of shareholders ... 
Return
The gain or loss of a security in a particular period. The return ... 
Return on Market Value of Equity ...
Return on market value of equity (ROME) is a comparative measure ... 
Equity
Equity is the value of an asset less the value of all liabilities ... 
Market Value Of Equity
The total dollar market value of all of a company's outstanding ... 
Equity Derivative
A derivative instrument with underlying assets based on equity ...

Economics
How Return On Equity Can Help You Find Profitable Stocks
It pays to invest in companies that generate profits more efficiently than their rivals. This is where ROE comes in. 
Fundamental Analysis
What Are The Main Differences Between Return On Equity (ROE) and Return On Assets?
Return on equity and return on assets are important measures for evaluating how well a company manages the capital its shareholders entrust to it. 
Term
What is the Shareholder Equity Ratio?
The shareholder equity ratio shows how much money shareholders will receive if a company has to liquidate its assets. 
Stock Analysis
Analyzing UPS's Return on Equity (ROE) (UPS)
Learn about UPS's return on equity (ROE), an important metric for investors. It is useful to compare the historical ROE and in relation to peers. 
Stock Analysis
Analyzing Ford's Return on Equity (ROE)
Understand how to interpret Ford's recent return on equity (ROE) ratios, what they tell you about Ford's performance and how it compares to its competition. 
Fundamental Analysis
Calculating the Equity Risk Premium
Equity risk premium is the excess expected return of a stock, or the stock market as a whole, over the riskfree rate. 
Stock Analysis
Analyzing Microsoft's Return on Equity (ROE) (MSFT)
Discover a detailed analysis of Microsoft's historical return on equity, and learn how its ROE stacks up to its competitors in the tech industry. 
Fundamental Analysis
Decoding DuPont Analysis
Get a deeper understanding of ROE with these threestep and fivestep calculations. 
Fundamental Analysis
Equity Multiplier
The equity multiplier is a straightforward ratio used to measure a company’s financial leverage. The ratio is calculated by dividing total assets by total equity. 
Active Trading Fundamentals
Analyzing Bank of America's Return on Equity (BAC)
Discover analysts 2016 outlook for Bank of America Corporation, including a look at the company's past, present and future return on equity performance.

What is the difference between a company's equity and its shareholders' equity?
Understand the difference and the interrelationship between shareholders' equity in a company and the company's actual total ... Read Answer >> 
What level of return on equity is common for a company in the banking sector?
Discover what the average return on equity (ROE) ratio is for companies in the banking industry, and understand the significance ... Read Answer >> 
What is the difference between a currency and interest rate swap?
Learn what the average return on equity for a company in the electronics sector is and what factors influence changes in ... Read Answer >> 
What is the average return on equity for a company in the financial services sector?
Learn the importance of calculating a company's return on equity and what businesses in the financial services industry average ... Read Answer >> 
How do you calculate shareholder equity?
Find out more about shareholders' equity, what shareholders' equity measures and how to calculate a company's shareholders' ... Read Answer >> 
How do you calculate return on equity (ROE)?
Return on equity (ROE) is a ratio that provides investors insight into how efficiently a company (or more specifically, its ... Read Answer >>