Date | Cash Flow | Action |
---|---|---|
XIRR Result:
Absolute Percentage:
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What is XIRR and Why it’s Used ?
XIRR, also known as Extended Internal Rate of Return, is a powerful financial metric utilized to gauge the performance of investments with diverse cash flows happening at varying intervals. Unlike the conventional Internal Rate of Return (IRR) method, which assumes cash flows to be evenly spaced, XIRR is tailored to handle irregular cash flows. This adaptability makes XIRR an invaluable tool for evaluating investments, loans, and financial projects in a comprehensive manner.
What sets XIRR apart is its ability to consider both the timing and the magnitude of these cash flows, offering a more precise assessment of an investment’s profitability. This, in turn, empowers investors and financial decision-makers to make well-informed choices regarding their investment portfolios. In practice, XIRR is widely embraced across finance, accounting, and investment analysis sectors to calculate the annualized return rate for intricate financial transactions, making it an indispensable tool in the world of financial management.
User Guide for XIRR Calculator
- Input Cash Flows: In the table, enter the date and cash flow amount for each transaction, use sign convention for the cashflows (“-ve” for Deposits and “+ve” for Outflows.
- Add/Delete Rows: Use
Add Row
to insert new entries orDelete
to remove a row. - Calculate XIRR: Click
Calculate XIRR
. The result will display as a percentage under the button.
One standout feature in using our XIRR calculator is use can add multiple rows and also delete the extra rows that is not required.
Example:
Date | Cash Flows |
20 September 2022 | -1000 |
20 October 2022 | -800 |
20 November 2022 | -300 |
20 December 2022 | 200 |
20 January 2023 | 2100 |
XIRR (%) | 39.69% |
ABSOLUTE (%) | 9.5% |
Tip: Use precise dates for accurate results.
- Ensure at least two cash flows are entered for calculation.
- Last Cash Flow in XIRR: In XIRR calculations, the final cash flow typically represents the final value or redemption value of your investment. If there’s an amount that has not been withdrawn but is available for withdrawal, it should be included as the final cash flow. This ensures the calculation reflects the true value of the investment at the end of the period
- Dates should be in chronological order.
Note: This calculator can also be used in case or calculating IRR using appropriate dates. Otherwise you can use IRR calculator.