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
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
(Expert)
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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