Return on equity and return on assets

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

12 June 2014 Can return on equity and return on assets be calculated for a half year or a year less than a year, to show your ROE/ROA for the proportionate period.

For eg: Net profit for the half year
divided by Average equity during the half year.

Will it make valid interpretations. Please guide urgently.

Thanks

Nikhil Kaushik

Nikhil Kaushik (Expert)
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13 June 2014 well if the period under analysis is a shorter one, then yes, such a ratio may give valid interpretation. but it would require caveat in terms of evenness of revenue over quarter to quarter etc.

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