Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A plain average return breaks down when money goes in and out on different dates, and XIRR handles that by using the exact timing of each cash flow. Investing $10,000, receiving $2,000 at six months, $3,500 at 1.7 years and $7,000 at 3.2 years gives a return of about 10.2 percent a year, on a net gain of $2,500. Two investments with the same gain can have very different XIRRs if one returns the money sooner.
Before you rely on it
What to check
Enter the dates as year fractions from the start and use the same sign convention for every flow: money out as negative, money in as positive.
The common error
Where people go wrong with XIRR calculator
Comparing an XIRR with a simple average return. They measure different things, and XIRR rewards an early return of cash even when the total gain is the same.
Sensitivity evidence
How initial investment changes the estimated XIRR
| Initial investment | Estimated XIRR | Net cash gain | Total positive cash flows |
|---|---|---|---|
| $8,000 | 22.1% | $4,500 | $12,500 |
| $9,000 | 15.6% | $3,500 | $12,500 |
| $10,000worked example | 10.2% | $2,500 | $12,500 |
| $11,000 | 5.7% | $1,500 | $12,500 |
| $12,000 | 1.8% | $500 | $12,500 |
Every input, tested
Which input moves the estimated XIRR most
| Input | Tested from | To | Estimated XIRR at each end | Swing |
|---|---|---|---|---|
| Initial investment | $9,000 | $11,000 | 15.6% to 5.7% | 9.9% (97%) |
| Years to final cash flow | 2.0 years | 4.0 years | 14.4% to 8.6% | 5.8% (57%) |
| Final cash flow | $6,300 | $7,700 | 7.6% to 12.7% | 5.1% (49%) |
| Cash flow 2 | $3,150 | $3,850 | 8.8% to 11.7% | 2.9% (29%) |
| Years to cash flow 2 | 1.0 years | 3.0 years | 11.4% to 8.7% | 2.6% (26%) |
| Cash flow 1 | $1,800 | $2,200 | 9.3% to 11.2% | 1.9% (18%) |
| Years to cash flow 1 | 1.0 years | 2.0 years | 9.8% to 9.1% | 0.704% (6.9%) |
Two variables at once
Estimated XIRR by initial investment and cash flow 1
| Initial investment \ Cash flow 1 | $1,600 | $2,000 | $2,400 |
|---|---|---|---|
| $8,000 | 19.6% | 22.1% | 24.8% |
| $9,000 | 13.5% | 15.6% | 17.8% |
| $10,000 | 8.4% | 10.2% | 12.1% |
| $11,000 | 4.1% | 5.7% | 7.3% |
| $12,000 | 0.345% | 1.8% | 3.2% |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Initial investment | $10,000 |
| Cash flow 1 | $2,000 |
| Years to cash flow 1 | 0.5 years |
| Cash flow 2 | $3,500 |
| Years to cash flow 2 | 1.7 years |
| Final cash flow | $7,000 |
| Years to final cash flow | 3.2 years |
| Estimated XIRR | 10.2% |
| Net cash gain | $2,500 |
| Total positive cash flows | $12,500 |
Where the inputs come from
List each cash flow with the date it happened, expressed here as years after the start: a deposit at month six is 0.5 and one at 20 months is about 1.7. Money you put in is an outflow from your pocket, and money you take out, including the final value, is an inflow. Get dates from your broker's transaction history. The example has three inflows at uneven dates, which is the case that a plain IRR cannot handle.
Using the estimated XIRR in a real decision
Compare the figure with what an index fund would have delivered on the same schedule of deposits for a meaningful judgment.
When the result stops applying
The result depends on accurate dates, and a small shift in the timing of a large flow moves it noticeably. When cash flows change sign more than once, the equation can have several solutions. The method assumes reinvestment at the same rate, so very high XIRRs from short periods should be treated with caution. Spreadsheet XIRR uses actual days, while this tool uses year fractions.
What to compare it with
For evenly spaced yearly flows use the IRR calculator, and for the simplest case use CAGR. To see whether timing helped you, compare with the time-weighted return. If the money was in a fund, check what the fund itself returned so you can separate the fund from your own contribution timing.
People also ask
Frequently asked questions
How is XIRR different from IRR?
IRR assumes cash flows arrive at equal intervals, while XIRR uses the actual date of each flow, so it fits real accounts with irregular deposits and withdrawals.
Where do I find the dates?
Your brokerage's transaction history or statements list the date and amount of each deposit, withdrawal and dividend. Convert each to years from the first date.
Why does XIRR give a huge number for a short period?
It annualizes the return, so a small gain over a few weeks becomes a large yearly rate. Treat it as a mathematical result, not a forecast.