Return On Average Equity (Historical)

Returns the historical return on average equity (ROE) for a company. ROE measures profitability relative to shareholders' equity.

Formula

ROE = Net Income / Average Shareholders' Equity

Parameters

Parameter Required Description
Symbol Yes Stock ticker symbol
Year Yes Fiscal year or period code
Quarter No Quarter 1-4
TTM No "TTM" for trailing twelve months

Interpretation

  • Higher ROE indicates better use of equity capital
  • Can be decomposed via DuPont analysis
  • Very high ROE may indicate high leverage

Examples

=hf_Return_on_Average_Equity("AAPL", 2023, 4)
Q4 2023 ROE
=hf_Return_on_Average_Equity("JPM", "ly")
JPMorgan last year
=hf_Return_on_Average_Equity("GOOGL", 2023, , "TTM")
TTM ROE
=hf_Return_on_Average_Equity("MSFT", 2023)*100
Convert to percentage

When to Use

  • Shareholder value analysis
  • DuPont decomposition
  • Comparing management efficiency
  • Quality stock screening

When NOT to Use

Scenario Use Instead
Return on assets hf_Return_on_Average_Assets()
Return on invested capital hf_Retun_on_Invested_Capital()
Average equity hf_Average_Equity()

Common Issues & FAQ

Q: Why is ROE extremely high? A: Very high ROE often indicates high financial leverage or low equity base.

Q: What's a good ROE? A: Generally, 15-20% is considered good; above 20% is excellent.

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