Return On Equity 5 Year Average
Returns the five-year average Return on Equity (ROE) for a company. ROE measures how effectively a company uses shareholders' equity to generate profits.
Supported Symbol Formats
| Type | Format | Example |
|---|---|---|
| US Stocks | SYMBOL | AAPL, MSFT |
Formula
ROE = Net Income / Shareholders' Equity
Interpretation
| ROE Level | Interpretation |
|---|---|
| > 20% | Excellent profitability |
| 15-20% | Good profitability |
| 10-15% | Average |
| < 10% | Below average |
Notes
- Returns value as a decimal (0.25 = 25%)
- High leverage can inflate ROE
- Compare within same industry for best results
Syntax
=ReturnOnEquityFiveYearAverage(Symbol)Returns
number
Five-year average ROE as a decimal
Examples
=ReturnOnEquityFiveYearAverage("AAPL")=ReturnOnEquityFiveYearAverage("MSFT")Coca-Cola 5-year avg ROE
Symbol from cell reference
=ReturnOnEquityFiveYearAverage("AAPL")*100When to Use
- Assess long-term profitability
- Compare companies' equity efficiency
- Quality investing analysis
- DuPont analysis component
When NOT to Use
| Scenario | Use Instead |
|---|---|
| Current ROE | ROE from key ratios |
| Return on capital | ReturnOnCapitalFiveYearAverage() |
| Return on assets | ReturnOnAssetsFiveYearAverage() |
| Historical fundamental | hf_Return_on_Average_Equity() |
Common Issues & FAQ
Why is the value less than 1?
ROE is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.25 = 25%).
Why is ROE very high for some companies?
Companies with low equity (high debt) can have inflated ROE. Check debt levels alongside ROE.
Can ROE be negative?
Yes, if a company has negative net income or negative equity, ROE can be negative.
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