# 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 shareholders' equity is changed to average shareholders' equity.

# 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 *shareholders' equity* is changed to *average shareholders' equity*.

## Explanation of Return On Average Equity

Typically, return on average equity refers to a company's performance over a fiscal year, so the average-equity denominator is usually computed as the sum of the equity value at the beginning and end of the year, divided by two.

Return On Average Equity (ROAE) is an adjusted version of the return on equity (ROE) measure of company profitability, in which the 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 average-equity denominator is usually computed as the sum of the equity value at the beginning and end of the year, divided by two.