How to Calculate Net Returns

How to Calculate Net Returns
Higher net returns indicate better-performing investments.

Calculate the total cost of your investment by adding what you paid for it to any fees you paid to acquire it. For example, if you paid $1,500 for a stock and paid a $10 broker's fee, your total cost would be $1,510.

Calculate the total return on your investment by adding the amount the asset was sold for and any payments, such as dividends, made to you while you owned it and subtracting the costs associated with the sale. For example, if you sold the stock for $1,700, received $50 in dividends while you owned it and paid a $10 broker's fee to sell it, you would add $1,700 to $50 and subtract $10 to get $1,740.

Divide the total return by the total cost. In this example, you would divide $1,740 by $1,510 to get about 1.152.

Subtract 1 from the result from step 3 to find the net return expressed as a decimal. In this example, you would subtract 1 from 1.152 to get 0.152.

Multiply the result from step 4 by 100 to convert from a decimal to a percentage. Finishing the example, you would multiply 0.152 by 100 to find your net return to be about 15.2 percent.