Return On Average Equity (ROE - Historical) Formula in Excel

Return On Average Equity is a key profitability ratio that measures how effectively a company generates profit from its average shareholders' equity. This formula helps investors and analysts understand the efficiency of a company's management in leveraging equity for earnings. By integrating this formula in Excel with MarketXLS, you can quickly access historical ROE data to make informed decisions.

Understanding Return On Average Equity (ROE - Historical)

• Purpose and Use Cases
  The Return On Average Equity (ROE - Historical) formula shows how much profit a company makes in relation to its average equity across a historical timeframe. This is essential for:

  • Comparing the profitability of companies within the same industry.
  • Evaluating trends in shareholder returns over time.
  • Identifying areas where a company may improve capital management.

• Key Benefits

  • Quickly retrieve and compare ROE data from different periods (annual, quarterly, trailing twelve months).
  • Simplify financial analysis and reporting directly in Excel.
  • Make data-driven investment decisions with up-to-date fundamental market data.

• When to Use
  Use the Return On Average Equity (ROE - Historical) formula when you need historical context on how effectively a company uses shareholders’ equity to generate profits. This is particularly useful for long-term investors, equity analysts, and portfolio managers.

Syntax and Parameters

=hf_Return_on_Average_Equity(Symbol, year, [quarter], ["TTM"])

Return Value:
• Typically returns a numeric value representing the ROE for the specified period. If data is unavailable or an error occurs, returns "NA".

?? Note: This function requires a valid MarketXLS historical fundamental data subscription to work correctly.

Examples and Usage

Below are a few common ways to use the Return On Average Equity (ROE - Historical) formula in Excel. Simply type each example into a cell in Excel:

=hf_Return_on_Average_Equity("MSFT", 2022)

Retrieves the ROE value of Microsoft (MSFT) for the year 2022.

=hf_Return_on_Average_Equity("MSFT", 2022, 2)

Retrieves the ROE value for MSFT for the second quarter of 2022.

=hf_Return_on_Average_Equity("MSFT", 2022, 3, "TTM")

Retrieves the trailing twelve months ROE value for MSFT from the third quarter of 2022.

=hf_Return_on_Average_Equity("MSFT", "lq")

Retrieves the ROE for the last reported quarter.

=hf_Return_on_Average_Equity("MSFT", "ly-1")

Retrieves the ROE from one year prior to the last reported year.

? Pro Tip: You can combine expressions like "lq-1" with a quarter parameter for more customized historical data retrieval if needed.

Performance Considerations

• Data Refresh: Large data requests (e.g., multiple formulas pulling historical fundamentals) may cause slight delays. Optimize by refreshing data in batches.
• Caching: MarketXLS caches data, which speeds up subsequent queries for the same parameters.

Special Cases and Limitations

• If the provided symbol is invalid or data is not available, the function returns "NA".
• Unix-based systems may interpret date and time differently, but this function handles them via MarketXLS servers.
• For additional date flexibility, you can pass direct date strings or Excel date-based functions, for instance:
  • =hf_Return_on_Average_Equity(A1, 2022) (where A1 contains the symbol)
  • =hf_Return_on_Average_Equity("MSFT", TEXT(A1,"yyyy")) (using Excel date functions)

Common Questions

1. What if I get an "NA" value?

   • Ensure your symbol is valid and that you have a subscribed data plan with MarketXLS. If the ticker or time period is not covered, the function will return "NA".

2. Why do I see different ROE values from various sources?

   • Different data providers may use slightly varied methodologies for calculating average equity or trailing periods. MarketXLS has a standardized approach but expect minor differences if comparing to third-party tools.

3. How often does the data update?

   • MarketXLS updates historical data at regular intervals. Check your MarketXLS subscription details and settings for refresh schedules.

4. Can I use cell references for the quarter?

   • Yes. For example:

     =hf_Return_on_Average_Equity("MSFT", 2022, A2)

     Where A2 might contain the numeric quarter or a string like "lq".

5. Does TTM data automatically adjust each quarter?

   • Yes. If you pass the "TTM" parameter, MarketXLS retrieves a rolling calculation of ROE for the last twelve months tied to the chosen period.

By using Return On Average Equity (ROE - Historical) in Excel with MarketXLS, you can quickly gauge how effectively a company utilizes its equity to generate profits over various historical periods, making your investment and analytical workflows powerhouse-efficient.