Absolute return vs CAGR vs XIRR

When evaluating the performance of investments, investors and analysts often rely on several key metrics to measure their success. Among these, Absolute Return, CAGR (Compound Annual Growth Rate) and XIRR (Extended Internal Rate of Return) are pivotal. Each of these metrics provides different insights into how an investment has performed, but they serve different purposes … Read more

How to use XIRR in Excel

Step 1: Arrange your cash flows in chronological manner Note: Step 2: Formula for XIRR Formula in excel is ” =XIRR( Values, dates, Guess) “ Values: Select the cash flow from top to down Dates: Select the dates from top to down (Chronological) Guess: Can leave it blank, default value is 10% Step 3: Get … Read more

Calculate XIRR on your Portfolio (Mutual fund/Stocks)

XIRR stands for Extended Internal Rate of Return. It is a tool used to calculate the return on investment when there are multiple cash flows occurring at irregular intervals. These cash flows may include both investments and withdrawals, reflecting the dynamic nature of one’s portfolio over time. XIRR provides an annualized return, making it easier … Read more

XIRR vs IRR vs CAGR

IRR (Internal Rate of Return) What it Measures: IRR calculates the annual rate of return for investments where cash flows regular or we can say that they are expected to be consistent over time. Use Case: It’s typically used for evaluating the profitability of investments or projects where cash inflows and outflows are evenly spaced … Read more