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

Examples

=ReturnOnEquityFiveYearAverage("AAPL")
Apple 5-year avg ROE
=ReturnOnEquityFiveYearAverage("MSFT")
Microsoft 5-year avg ROE
=ReturnOnEquityFiveYearAverage("KO")
Coca-Cola 5-year avg ROE
=ReturnOnEquityFiveYearAverage(A1)
Symbol from cell reference
=ReturnOnEquityFiveYearAverage("AAPL")*100
Convert to percentage

When 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

Q: Why is the value less than 1? A: ROE is returned as a decimal. Multiply by 100 to get percentage (e.g., 0.25 = 25%).

Q: Why is ROE very high for some companies? A: Companies with low equity (high debt) can have inflated ROE. Check debt levels alongside ROE.

Q: Can ROE be negative? A: Yes, if a company has negative net income or negative equity, ROE can be negative.

Get Access to 1 Billion Usable Market data points IN YOUR EXCEL SHEETS WITH EASY TO USE EXCEL FUNCTIONS

Get started today
MarketXLS Excel Add-in Tutorial - How to Use Return On Equity 5 Year Average and Other Financial Formulas
▶
How does MarketXLS work?

Related Functions