Excel Investment Returns: Geometric, Arithmetic, and Dollar-Weighted Methods

Understanding how your investments actually perform requires more than just basic averaging. Choosing the wrong return metric can lead to misleading financial decisions and skewed portfolio analysis. This text-based course guides you through the core concepts of investment mathematics, helping you confidently calculate and compare different return methodologies using Excel. What you'll learn: Understand the fundamental differences between arithmetic, geometric, and dollar-weighted returns; Calculate simple and compounded investment returns using native Excel formulas like AVERAGE and GEOMEAN; Apply the dollar-weighted return method using Excel's XIRR function to account for cash inflows and outflows; Analyze real-world investment scenarios to determine which return metric is most appropriate for your portfolio; Implement clean financial modeling layouts and modern Excel formulas for error-free calculations. You will start by mastering foundational financial terms and theory before moving into step-by-step Excel calculations and practical scenario analysis. Designed for beginners, this course requires only a basic familiarity with Excel and no prior background in finance or investment analysis. Start reading today to make more informed, data-driven investment decisions.