DEFINITION of 'Return On Average Equity  ROAE'
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 Capital Employed (ROCE)
Return on Capital Employed (ROCE) is a financial ratio that measures ... 
Energy Return On Investment  EROI
The amount of energy that has to be expended in order to produce ... 
Return On Assets  ROA
An indicator of how profitable a company is relative to its total ... 
Shareholders' Equity
A firm's total assets minus its total liabilities. Equivalently, ... 
Net Income  NI
1. A company's total earnings (or profit). Net income is calculated ...

Markets
ROA And ROE Give Clear Picture Of Corporate Health
Both measure performance, but sometimes they tell a very different story. This is why they’re best used together. 
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. 
Investing
Spotting Cash Cows
We show you why some of these companies stand apart from the herd. 
Stock Analysis
Analyzing Sirius XM's Return on Equity (ROE) (SIRI)
Learn more about the Sirius XM's overall 2015 performance, return on equity performance and future predictions for the company's ROE in 2016 and beyond. 
Stock Analysis
Analyzing Dish Network's Return on Equity (ROE) (DISH, TWC)
Analyze Dish Network's return on equity (ROE), understand why it has vacillated so greatly in recent years and learn what factors are influencing it. 
Stock Analysis
Analyzing Yelp's Return on Equity (ROE) (YELP)
Learn about Yelp's return on equity (ROE) and see how it compares to industry peers. See how net profit margin, asset turnover and financial leverage impact ROE. 
Stock Analysis
Analyzing Southwest's Return on Equity (ROE) (LUV)
Find out how Southwest's net margin, asset turnover and financial leverage impact return on equity (ROE). How does its ROE compare to peers and historical results? 
Stock Analysis
Analyzing Baidu's Return on Equity (ROE) (BIDU)
Find out how Baidu's return on equity (ROE) compares to industry peers and historical results. See how DuPont analysis treats net margin, asset turnover and leverage. 
Stock Analysis
Analyzing Altria's Return on Equity (ROE) (MO)
Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE. 
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.

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 Full Answer >> 
What is the average return on equity for a company in the retail sector?
The retail sector includes automotive; building supply; distributors; general; grocery and food; online; and special lines ... Read Full Answer >> 
What is the average return on equity for a company in the utilities sector?
The average return on equity (ROE) for the utilities sector is approximately 11%. This is a little below the overall market ... Read Full Answer >> 
What is the formula for calculating return on equity (ROE) in Excel?
The return on equity, or ROE, is used in fundamental analysis to measure a company's profitability. The formula to calculate ... Read Full Answer >> 
What is the average return on equity for a company in the automotive sector?
As of January 2015, the average return on equity, or ROE, for companies in the automotive sector was approximately 17%, which ... Read Full Answer >> 
What are common growth rates that should be analyzed when considering the future ...
Some of the most common growth rate metrics that investors and analysts consider in evaluating a company's future prospects ... Read Full Answer >>