Average Shareholder's Equity

Average Shareholder's Equity - The average shareholder's equity is a calculation used to determine the shareholders' equity component, which is usually a variation of the return on the amount of equity formula and tells how well the company is doing at reinvesting earnings to generate additional earnings that is equal to the fiscal year end's after tax income. This formula is based on the adding the shareholders equity at the beginning of this period compared to the shareholder's equity at the end of the same period, and averaging the total.