Stock Return Calculator

What is a Stock Return Calculator?

A stock return calculator is a digital tool that computes the returns on the investments you have already made and those you are planning to make. This calculator takes into account multiple variables that help it compute the returns with utmost accuracy.

• Amount Invested/To Be Invested: It is the total amount invested or planned to be invested in the stock.
• Current Amount: It is the current market value or selling value of the investment.
• Time Period: This indicates the duration for which the investment is or will be held.
• Charges: This includes overall trading and transaction-related charges applicable to the trade, including STT, exchange transaction charge, GST, SEBI charges, stamp duty, total tax and charges, and points to breakeven.

Based on the specified components, the calculator calculates the return a stock is going to offer. This, in turn, helps investors either be prepared for the amount they are about to receive or make a comparison between stocks to determine which one they should invest in for maximum profits at maturity.

What Formula We Used in the Stock Return Calculator?

We, at Strike Money, used the following formula in the stock return calculator.

Stock Return = Current Amount − Investment Amount − Total Tax and Charges

Here:

Total Tax and Charges = STT + Exchange Charges + GST + SEBI Charges + Stamp Duty + Brokerage

Stock Return % = (Stock Return ÷ Investment Amount) × 100

This is an absolute figure — it reflects your total profit or loss regardless of how long you have held the stock. See Annualised Stock Return below for the time-adjusted figure.

How to Calculate Stock Profit or Loss using This Calculator?

To calculate stock profit or loss using this stock return calculator, investors can follow these four steps.

1. Step 1: Subtract the Invested Amount or To Be Invested Amount from the Current Amount. This will give you the Gross Return you are supposed to get.
2. Step 2: Subtract all the taxes and charges applicable to the transaction from the Gross Return figure obtained. This will give you your Net Return, i.e. your Stock Return — it holds regardless of the holding period.

Note: Step 1 and Step 2 have been combined in the formula stated above as No. 1.

If you would like to check the stock return rate, you can add two more steps to the process.

3. Step 3: Divide the Net Return by the Total Invested Amount or the To Be Invested Amount.
4. Step 4: Multiply the resultant by 100.

This will give you the return rate, which you can consider to calculate an estimated stock return further.

Download Stock Return Calculator Excel

Click here to download the stock return calculator in Excel format.

What is Total Stock Return?

The total stock return is the amount that an investor receives as a return on the investments they make over a period of time. This includes both the return from the stock price movement as well as the dividend share in the companies they invest in. This helps investors know how much profit or loss they are going to make out of an investment over a period.

The components that ultimately build the total stock return for an investor include price return, dividend return, and total return.

• Price return: This return is the profit or loss calculated on the basis of the fluctuations in the prices of the stock over a period. It is assessed in comparison with the amount at which investors bought a stock and the current selling price of the same stock. If the price shows an increase, it's a profit or capital gain, while if the current price is lower than the price at which they purchased it, it becomes a loss, more particularly called capital loss.
• Dividend return: This return is computed based on the share an investor has in the profits of the company they invested in. In this case, the investor is the shareholder in the company, which offers them a dividend in proportion to the investment they make in the company. Many companies choose to offer regular dividend payments to the shareholders.
• Total return: This combines both the price return and dividend return to measure the complete profitability of a stock investment. It reflects the actual earnings generated from stock price appreciation, along with dividend income over the investment period.

Should Dividends be Included in Return Calculation?

Yes, dividends should be included in the return calculation. Without combining the dividend return, the calculation of the total return received or to be received by an investor remains incomplete. The dividend comprises a significant proportion of the stock return an investor is subject to receiving over the long term. Hence, ignoring the dividend inclusion must be avoided.

Are Fees, Brokerage & Taxes Included in Stock Return Calculator?

Yes, fees, brokerage charges, and taxes are included in the stock return calculator.

• Brokerage fees: This is the amount that a broker charges to execute your transactions.
• Securities Transaction Tax (STT): It refers to the tax levied on the buying and selling of securities listed on stock exchanges.
• Exchange transaction charges: This is the fee that stock exchanges charge for carrying out the executing buying and selling orders.
• GST: It is the destination-based indirect tax levied on the supply of goods at multiple stages.
• SEBI charges: The Securities and Exchange Board of India (SEBI) levies this fee on all transactions done in the Indian stock market. The revenue generated helps it to carry out its regulatory functions.
• Stamp duty: It refers to the government-led tax levied on the issuance, transfer, and sale of a financial instrument.

Without considering these charges, the actual return generated from a stock investment cannot be calculated accurately.

Absolute Return vs Percentage Return Calculation

The absolute return vs percentage return calculation depicts the differences between one return that talks about the net profit or loss an investor is subject to receive or incur, and another return that indicates how fruitful one's investment could prove when compared against its original cost.

Absolute Return & Its Calculation

The absolute return calculates the end-to-end profit or loss percentage that an investment makes. It simply checks the initial investment and the final investment amounts and calculates the net profit or loss figures, without considering the time period.

The formula that calculates it:

Absolute Return = [(Final Value − Initial Value) ÷ Initial Value] × 100

Suppose an investor invests ₹50,000 in stocks, and the current investment value becomes ₹60,000. Their investment return would be:

Absolute Return = [(60,000 − 50,000) ÷ 50,000] × 100 = 20%

Percentage Return & Its Calculation

The percentage return calculates the profitability of an investment over a specific period, usually annual. The formula used to calculate it:

Percentage Return = [(Final Value ÷ Initial Value)^(1/N) − 1] × 100

Here, N = Number of years for which the investment is held.

Continuing with the same example, with 3 years being the investment period, let us see how we can find out the percentage return:

Percentage Return = [(60,000 − 50,000) ÷ 50,000] × 100 = 20%

While absolute return shows the total investment growth, percentage return helps measure the average annual growth generated over time.

How do I Calculate Stock Return with Multiple Purchases?

You can calculate stock return with multiple purchases by, firstly, calculating the average purchase price of all stock purchases made over different periods.

Average Purchase Price = Total Investment Amount ÷ Total Shares Purchased

This output gives you the breakeven price, which gives you an idea whether your investment will give you a profit or incur a loss.

After this, the current market value and applicable taxes or charges can be used to determine the overall stock return.

Suppose an investor purchases shares of the same company in three different transactions, which are currently priced at ₹140 per share.

Here,

Total Investment Amount = 1,000 + 2,400 + 1,650 = ₹5,050

Total Shares Purchased = 10 + 20 + 15 = 45

Step 1: Calculate the Average Purchase Price

As the two required pieces of information are accessible, we can calculate the Average Purchase Price.

The average purchase price of the stock is approximately ₹112.22 per share, which is the breakeven price, i.e., you are neither at a profit nor at a loss.

Subtracting this average price from the current market price will tell you whether your investment would yield profits or incur a loss. In this case, it's a gain per share.

Gain per share = Current market price − Average purchase price = 140 − 112.22 = ₹27.78

Step 2: Calculate Total Current Market Value

Next, as the current per-share market value is known, we can calculate the total market value for the shares purchased in three rounds.

Step 3: Calculate Stock Return

Assume the total taxes and charges applicable are ₹150.

Step 4: Calculate Stock Return Percentage

Therefore, the investor earns a total stock return of ₹1,100 or approximately 21.78% after considering all purchases, taxes, and charges.

How do You Calculate Annualised Stock Return?

You can calculate the annualised stock return by first calculating the yearly return for the investment over a period.

Annualised Stock Return = {[(Current Amount − Total Tax and Charges) ÷ Investment Amount]^(1/N) − 1} × 100

Here:

• N = Time period
• Total Tax and Charges = STT + Exchange Charges + GST + SEBI Charges + Stamp Duty + Brokerage

Let's say you invested ₹50,000 in stocks, and after holding the investment for 3 years, its current value became ₹75,000. During this period, you also paid ₹2,000 as total taxes and charges, including STT, brokerage, GST, SEBI charges, exchange transaction charges, and stamp duty.

Based on the values provided, we can easily calculate your annualised stock return.

Annualised Stock Return = {[(75,000 − 2,000) ÷ 50,000]^(1/3) − 1} × 100

Therefore, my annualised stock return comes out to approximately 13.47%.

Is CAGR the Same as Annualised Return?

No, CAGR is not the same as annualised return. Though both calculate the annual returns in one way, annualised return is a more generic term, while CAGR is a more specific form of annualised return.

The stock return calculator helps investors obtain the profitability figures by considering factors such as investment amount, market value, taxes, brokerage charges, dividends, and holding period. By understanding metrics like absolute return, percentage return, and annualised return, investors can make more informed investment decisions, compare multiple investment opportunities, and estimate their actual gains or losses more accurately over time.