5Y Avg Return on Equity is the average of the annual ROE number over the previous 5 financial years

As discussed above, ROE helps understand number of units of profit generated per unit of money invested in the company. Higher the number better the utilisation of equity capital

When analysing 2 or more companies, comparing ROE numbers for a single year will not suffice. It is possible that profits have increased or decreased substantially due to extraordinary profits or losses in a particular year, thereby falsifying the picture. Suppose we are comparing 5 years of data for 3 companies, we will have to inspect 15 (3*5) data points which can be cumbersome

Instead, using average ROE is more simpler as well as eliminates the possibility of data distortion due to one-off earnings or losses