How to Calculate Absolute Return on Investment
How to Calculate Absolute Return on Investment ? Return on an Investment is a calculation to assess how the investment is performing. As every investment have a group of Inflows and Outflows. The Comparison of the inflows and outflows is the Return for the investor from making the investment. Returns may be Positive (+) or Negative (-) . A Positive denotes the profit on an investment and Negative gives the loss. For eg: Akhil bought a Real estate property for Rs. 30 lakhs and sold it to Rs. 40 lakhs Suresh bought a 100 shares of XYZ Company with the amount of Rs. 20,000/- and sold all the stocks for Rs. 15,000/- The above example tells that Akhil had a profit of Rs. 10 lakhs i.e the return on investment is Rs. 10 lakhs. Suresh had a loss of Rs. 5,000/- from his stocks. So, it denotes the Negative Return on his investment. Measuring Investment Returns: Returns can be measured by comparing the amount of Inflows and Outflows for the investment made in Absolute Rupee Terms. ...