Return on Average Equity Clause Samples
The Return on Average Equity clause defines how a company's profitability is measured in relation to the average equity held by its shareholders over a specific period. Typically, this clause outlines the formula for calculating the return, which involves dividing net income by the average shareholders' equity, often averaged over the beginning and end of the fiscal year. By standardizing this calculation, the clause ensures consistent and transparent assessment of financial performance, allowing stakeholders to compare profitability across periods or with other companies.
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Return on Average Equity. “Return on Average Equity” (“ROAE”) for the three-year Performance Period is the Company’s mean average operating earnings (i.e., net income from continuing operations less realized capital gains and losses and certain other non-operating items), expressed in dollars, during the three-year Performance Period divided by the Company’s average adjusted equity, expressed in dollars, for the Performance Period. The ROAE will be determined by the Company using generally accepted accounting principles, consistently applied.
Return on Average Equity. “Return on Average Equity” shall mean twelve months GAAP net income plus (minus) certain Non Cash Items and Merger Expenses divided by average Tangible Net Worth, for the period ending November 30th.