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 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 Linked Note  ELN
An instrument whose return is determined by the performance of ... 
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. 
Markets
Profitability Indicator Ratios: Return On Equity
By Richard Loth (Contact  Biography)This ratio indicates how profitable a company is by comparing its net income to its average shareholders' equity. The return on equity ratio (ROE) measures ... 
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. 
Forex Education
5. Learn about Shareholders' Equity
Learning to read the balance sheet can provide great insight into the financial strength of a company. 
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. 
Professionals
Return on Equity and the Dupont System
CFA Level 1  Return on Equity and the Dupont System. Learn how the DuPont system shows the interrelationship between financial ratios. Shows how to calculate and manipulate the DuPont Formula. 
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. 
Professionals
Return on Investment Ratios
CFA Level 1  Return on Investment Ratios. Operating profitability looks at two forms of ratios. This section covers the return on investment ratios, such as ROA and ROE.

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